Germany's ruling political parties have begun talks on a second economic stimulus package that could total up to €50 billion. But the negotiations may prove difficult because the Social Democrats oppose conservative plans for the program to include tax cuts.

(The problem is not the nsistence of certain quarters on tax cuts, the problem is opposition to it...

In talks on Sunday night, Chancellor Angela Merkel's Christian Democrats had given in to their Bavarian conservative allies in the Christian Social Union who had demanded tax cuts.

The two parties agreed to raise the income tax base threshold to €8,000 from €7,664 and to start eliminating so-called "cold progression" under which tax payers are bumped into higher tax brackets even if inflation-adjusted incomes haven't grown.

However, the SPD, which shares power with the conservatives in Merkel's grand coalition, doesn't want tax cuts and has even said it wants to raise taxes for top earners. "It will be very difficult to reach an agreement on the tax issue," SPD deputy chairwoman Andrea Nahles said.

She said the conservative tax cut plans would mainly benefit medium and high-income groups and that it made more sense to cut welfare contributions because this would also help low-income households and thereby boost consumer spending.

('Welfare contribution' means emloyers' and employees' contribution for each employee to social security and retirement funds.)

_{*Lunatic*, n.
One whose delusions are out of fashion.}