German Coalition Close to a Reality After Concessions Made

Two German parties aiming to join Chancellor Angela Merkel’s conservatives in a governing coalition dropped demands on tax reforms and climate policy on Tuesday, breaking a logjam after two weeks of often tense negotiations.

With the three camps still divided on several issues, the pro-business Free Democrats (FDP) gave some ground, saying they would accept more modest income tax cuts than a campaign pledge of 30-40 billion euros ($35-46 billion) of relief.
The party would focus instead on securing the abolition of the solidarity tax that Germany introduced after reunification in 1990 to support poorer eastern states, and on tax relief for families and smaller businesses, its leader Christian Lindner told reporters.

He was speaking before Tuesday’s round of exploratory coalition talks in parliament.
The ecologist Greens said they would no longer insist on fixed dates to shut down coal-fired power stations and to ban cars with internal combustion engines.
The three-way coalition the parties are trying to form is untested at national level, and the negotiations follow a fracturing of the vote in national elections in September, when Merkel’s conservatives bled support to the far right.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza