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Germany's new coalition agrees tax cuts

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Germany's new coalition agrees tax cuts


Almost a month after the federal election, Germany’s coalition government is ready to take office next week. During a late-night meeting, Chancellor Angela Merkel’s conservative CDU party reached a deal with the Free Democrat Party. Of the utmost importance – reviving Germany’s economy with tax cuts.

Guido Westerwelle, the FDP leader said: “We want to reduce taxes for families. This will start on January 1, next year. We want to achieve major tax reform, and for this reason we are very pleased to have decided a new tax structure, and an accordant rank tariff as part of the coalition treaty.”

The plan, detailed in a 128 page document, centres on the pledge to give income tax relief worth 24 billion euros to low and middle income families.

Filling the hole left by these tax cuts will be the job of new Finance Minister, Wolfgang Scheuble, a veteran of the CDU party. And after a month of political wrangling, the cabinet positions have been equally carved up. Despite his perceived lack of political experience, Guido Westerwelle will become the new foreign minister.

Becoming Germany’s new representative in Brussels, the CDU party’s Gunter Urtinger becomes EU Commissioner. As a recent critic of Merkel, his appointment came as a surprise.

Not yet in office, but already there is dissatisfaction with the new government and its plans. Several hundred protesters gathered in central Berlin, angry at controversial cuts in social and unemployment benefits.

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