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13 January 2018, 05:06 | Rufus Hill
Germany Hints At Solidarity Tax Cut
Chancellor Angela Merkel yesterday struck a deal with Social Democrat (SPD) rivals to open government coalition talks, easing months of uncertainty that has undermined Germany's global role and raised questions about her political future.
A blueprint for formal negotiations was agreed between Merkel's Christian Democrats (CDU) and their former coalition partners, the Social Democrats (SPD) almost four months after elections were held September.
Politicians stayed up all night thrashing out a deal, with the talks lasting more than 24 hours.
While the SPD's demands that the tax burden be increased on high-income taxpayers were refused by the CDU, the largest political party, an agreement to reduce the solidarity tax on low- and middle-income taxpayers was reportedly secured.
"I think we have achieved outstanding results", Schulz told reporters.
"We have realised that the world isn't waiting for us", Merkel said at a press conference on Monday morning.
"The agreement between Merkel and Schulz forms the basis for a new coalition government in Germany".
The deal was welcomed by Germany's European allies, but her prospective partner now faces a tough task to sell it to skeptical supporters.
While the main issues were refugees, climate goals, social security, and the relationship with Europe, taxes and the ability to pay for new programs appear to have been the sticking point overnight.
Merkel has ruled with the SPD in a sometimes unwieldy "grand coalition" - or "GroKo", the German-language acronym - in two of her three previous terms in office, including in the last parliament from 2013-2017. The coalition blueprint starts with the topic of Europe and includes pledges to strengthen common European Union foreign and defence policy.
The conservatives also performed poorly in the election, and the three coalition parties' support dropped by a total of almost 14 percentage points.
GERMANY will limit the number of asylum seeker arrivals to around 200,000 annually under a draft coalition agreement sealed today in marathon talks between the country's two biggest parties.
Though most European economies - and the euro - have been in good shape in recent months, the lack of German leadership was threatening to affect Brexit and stall the push for European Union reform, led most vocally by French president Emmanuel Macron.
Pledges to spend more in poorer regions and allow up to 1,000 family members each month to join refugees already living in Germany also seemed created to placate SPD members distrustful of governing with Merkel again. The SPD leader plans to tour local party chapters next week to sell the deal, while the SPD's youth organization plans protest rallies to lobby against it.
Jean-Claude Juncker, European Commission president, hailed the parties' plans for Europe's future as "very significant" and "positive". The coalition paper foresees the new government drawing up a timetable for phasing out coal power by the end of this year.
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