Fri Nov 11th, 2005 at 02:14:38 PM EST
UPDATE 11.11.05 @ 19.57. German coalition poised for power.
Germany's conservative Christian Democrats (CDU) and centre-left Social Democrats (SPD) have reached a deal to form a coalition government. The deal followed four weeks of painstaking negotiations after inconclusive elections.
Party members said they had agreed to tackle Germany's budget deficit by raising some tax rates and cutting public spending.
CDU leader Angela Merkel is to become Germany's first woman chancellor.
Reports say top wage earners will have to pay an extra 3% in income tax, VAT will rise by 3% and social insurance contributions will also go up.
(Looks like the SPD held out and got their wish...though I'm sure there was much give and take)
The original post is below...
From this morning's Swissinfo: German parties near power-sharing coalition deal
BERLIN (Reuters) - German parties negotiating a new coalition government under conservative Angela Merkel go into make-or-break talks on Friday with some key agreements already in place.
The CDU and their sister party, the CSU have covered some of the trickiest areas with the centre-left Social Democrats (SPD) in almost a month of surprisingly harmonious talks.
The parties have reached agreements on tax, budget and labour market policy and want a 25 billion euro (17 billion pounds) investment programme on research and infrastructure to boost growth, politicians at the talks have said.(...)
All the parties have given this Saturday as the deadline to make their agreements. Will they make their deadline?
Here seems to be the remaining sticking points:
The deficit - They have already agreed to bring the deficit -- which will breach European Union limits for a fourth straight year in 2005 -- back in line with EU rules by 2007. But they must work out how to get the 35 billion euros they say they need to meet that target.
-The parties have also agreed on moves to loosen job protection rules and cut payroll costs in a bid to bring down Germany's chronically high jobless rate.
But there are still major differences over conservative demands to extend the lifespan of nuclear power stations as well as an SPD demand for a so-called "rich tax" on high earners.
-The Berlin Zeitung reports that the SPD would not weaken its insistence on decommissioning the 17 active nuceur power plants in coming years, and the conservatives may be ready to agree.
It does sound like the parties are very close to an aggreement, is there anything that may block the final agreement of a Grand Coalition?