ibusinesslines.com March 23, 2018

Germany is heading towards another GroKo after coalition talks reach breakthrough

13 January 2018, 04:00 | Justin Tyler

Germany Hints At Solidarity Tax Cut

Merkel strikes preliminary deal to hold power in German coalition

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.

The draft programme, outlining policy goals during Merkel's fourth term, must now be approved by 600 SPD delegates at a party congress on January 21 and then by the party's more than 400,000 rank and file members.

There were also compromises on tax and employer-funded health insurance, and a plan to push for greater financial European Union integration.

Lueder Gerken of the Centre for European Policy Studies said that the promise of "a new start" for Europe sends "an important message" to Europe and especially Macron.

Under the blueprint, Germany will seek to limit the annual intake of people seeking safe haven to around 200,000, in line with a long-standing demand of the CSU, whose southern state of Bavaria was at the frontline of the refugee arrivals.

Party sources said they had agreed to a blueprint for formal coalition negotiations in a move that could ultimately end months of political deadlock in Europe's largest economy after the election last September.

"I think we have reached excellent results", said Martin Schulz, SPD leader and ex-European Parliament president.

The VdK, representing 1.8 million members, also welcomed the prospective coalition's intention to fix acute shortages of nursing personnel for senior residents but said access to basic pensions for the poor was far from everyday reality.

The German parties' glacial place in setting up a new administration is testing the patience of voters who gave Merkel's Christian Democratic-led bloc the most votes in the September 24 contest.

"We are working seriously. on creating the conditions to be able to live well in Germany in 10 or 15 years", she said.

The CDU and the SPD began talks on a grand coalition after negotiations for a so-called Jamaica coalition, between the CDU, the Free Democrats, and the Green Party, collapsed a year ago.

Had the talks failed, Merkel's only options would have been to form a minority government or hold new elections.

The euro climbed to a three-year high after news of the breakthrough in the talks.

The three coalition parties' support dropped by a cumulative total of almost 14 percentage points in the election.

The parties pledged to fight tax dumping and evasion in Europe, pushing for "fair taxation of big companies" including internet giants Google, Apple, Facebook and Amazon, and called for unspecified minimum rates for corporate tax.

Prime Minister Boyko Borissov of Bulgaria, which now holds the bloc's rotating presidency, said the European Union was waiting "impatiently" for Merkel to reemerge, heading a new coalition: "for the benefit of all".

Although Merkel's Christian Democrats differ with many of French President Emmanuel Macron's proposals for sweeping reforms of the European Union, Merkel expressed hope they would hammer out compromises to address major challenges facing the bloc.

"In the seemingly long period of time since the election, we've seen that the world is not waiting for us", said Merkel.

Ms. Merkel used her statement to talk about the many technical solutions included in the agreement.

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