Coalition talks
October 19, 2009
There has been a lot of speculation about the talks being held between German Chancellor Angela Merkel's Christian Democrats (CDU/CSU) and the liberal Free Democrats (FDP). As discussions enter their final full week, they appear to have made progress on one big item - tax cuts.
According to public broadcaster ARD, the two sides have agreed to tax cuts of 20 to 23 billion euros ($30-34 billion). This is significantly less than the 35 billion the FDP had promised during its election campaign, and much closer to the 20 billion in tax cuts that the CDU was looking for.
However, what hasn't been agreed is how to finance those tax cuts and both CDU and FDP officials have said they won't be making any announcement until mid-week at the earliest.
According to Georg Fahrenschon, finance minister in the CSU government in the southern state of Bavaria, the goal now is to use any tax cuts as a means to boost the economy.
The working group charged with hammering out the details of a deal on tax and budgetary policy is meeting again this Monday under the direction of Merkel's chief of staff, Thomas de Maziere.
No news on health fund
While discussion over tax cuts and the nation's financial future look like they will be wrapping up soon, the two sides do not appear to have made as much headway on another pressing issue: the future of Germany's health care fund.
Chief negotiators from both sides – current CDU Family Minister Ursula von der Leyen and Philipp Roesler from the FDP – have indicated the talks have taken a huge step forward.
Juergen Ruettgers, premier of the state of the North Rhine-Westphalia, didn't rule out premium increases for health and unemployment insurance.
"Of course we are intensively contemplating where we can save money," Ruettgers told ARD, "And that includes premiums."
As negotiations continue, both sides are extremely aware of just how much time pressure they are under. For almost two weeks they have been holding meetings to hammer out the new center-right coalition. They have given themselves just a few more days to finalize coalition agreement, and they haven't even gotten to the sensitive topic of cabinet posts yet.
mrm/dpa/Reuters
Editor: Chuck Penfold