German parties reach agreement on finances but delay debate on EU
(Bloomberg) Chancellor Angela Merkel’s bloc and two rival parties reached a preliminary agreement on finances in all-night talks, while they pushed off a discussion over European policy amid differences, as the factions seek to form a new government.
Merkel’s Christian Democratic-led bloc, the environmental Greens and the pro-market Free Democratic Party finished more than six hours of exploratory talks in Berlin agreeing to maintain the country’s balanced budget, while seeking tax relief for families with children and middle-income earners.
Negotiations on European policy, also on the agenda for Tuesday, were pushed to Thursday. The Greens’ general secretary, Michael Kellner, cited differences over the parties’ approach, particularly to Turkey’s accession to the European Union.
"We’re very satisfied with the outcome this evening," Peter Tauber, the general secretary of Merkel’s Christian Democratic Union, told reporters after the talks ended early Wednesday. His FDP counterpart, Nicola Beer, cited a "surprisingly good" result after the talks yielded progress on the party’s tax-cutting agenda, while preserving budget discipline.
A month after Merkel emerged victorious but weakened in the national election, the multiparty talks to form a new coalition government are still only at the start of an exploratory phase. Party officials have said they aim to complete negotiations for the complex alliance by the end of the year, delaying Merkel’s fourth term in office.
The Greens’ Kellner lauded support from the disparate parties for funding for climate protection as well as a broadly pro-European stance.
"Although there are very different positions on which instruments will be used to that end," Kellner said, citing Turkey.
In a draft agreement, the parties said they aimed to adhere to Germany’s constitutional debt limits, maintaining a balanced budget and pledged not to raise taxes on capital assets. The potential coalition partners will assess mid-term financing options with the aim for targeted tax cuts and increased investments.
Those measures include a phaseout of the post-reunification solidarity tax to fund infrastructure in the formerly communist east, funding for energy-efficient homes, building affordable housing and funding research and innovation, according to the draft.
The parties said they’ll reassess subsidies that place into question Germany’s climate goals.