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German coalition talks near consensus

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German coalition talks near consensus


The German Chancellor Angela Merkel’s CDU conservatives and the pro-business Free Democrats appear to have bridged their differences on tax cuts and now look like clinching a centre-right coalition before the weekend.

Merkel’s party and Bavaria’s Christian Social Union had been at loggerheads with the FDP over forming a credible financial agenda. But unconfirmed reports say the two sides have agreed tax cuts worth up to 23 billion euros. If so, it would be more than Merkel’s election pledge but a long way short of the FDP’s promise of 35 billion euros. As the parties have already agreed on financial market regulation and several areas of foreign policy, the only remaining stumbling block is health. Germany’s so-called “health fund” needs a multi-billion euro cash injection, a divisive issue as questions are being asked over the efficiency of the fund in the first place. Agreement has been reached on energy: despite continuing protests from anti-nuclear groups, some atomic power plants will now keep working until 2022, although precise details are unclear.

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