Main German parties make ‘big step’ toward coalition

BERLIN – Germany’s two main parties on Monday made a big step towards an accord on a power-sharing “grand coalition” government, the future finance minister said after talks here.

Peer Steinbrueck said “appreciable progress” had been made on the central question of cleaning up Germany’s finances, after agreement was reached on other matters including Turkey’s bid to join the EU. The conservatives of incoming chancellor Angela Merkel and the Social Democrats (SPD) of outgoing chancellor Gerhard Schroeder are working towards a Saturday deadline to form the first “grand coalition” government in Germany since the late 1960s.The parties announced after talks that they had agreed on the issues of domestic policy, defence, agriculture, transport, raising the retirement age and Turkey’s prospective membership of the European Union.Turkey is a controversial issue because Schroeder has been a staunch supporter of attempts by the predominantly Muslim country to join the European bloc while the Christian Democrats believe a “privileged partnership” rather than full membership should be offered.But the formula agreed on clearly states that “there are no prior guarantees about the outcome” of the membership process, said Markus Soeder, the general secretary of the Christian Social Union (CSU), the Bavarian sister party of Merkel’s Christian Democratic Union (CDU).”A very diplomatic formula was found in the end,” said leading SPD official Olaf Scholz.The term “privileged partnership” will however not feature in the coalition government’s policies.A widely expected agreement was reached to raise the retirement age from 65 to 67 from 2010, CDU secretary general Volker Kauder said.Steinbrueck said there was a good chance of reaching agreement by week’s end on finding a solution to the complex issue of finance, including tax rises and savings in spending.Among the most controversial issues are proposals to raise the value-added tax and make the wealthiest Germans pay more tax, despite warnings from economists that such measures could put the brakes on a budding economic recovery.CDU finance negotiator Roland Koch said the basis for an agreement had been found.He mentioned the raising of civil servants’ weekly hours to 41, but added the SPD call for higher taxes for the better-off remained controversial.The online edition of Focus magazine meanwhile reported that both sides had agreed that value added tax will rise to 19 per cent from 16 per cent from January 1, 2007, one point higher than the conservatives had proposed in their election campaign.However, the parties have decided to put reform of the health system on hold until next year.The parties announced earlier on Monday that they had agreed a long-awaited overhaul of Germany’s cumbersome federal system.The current division of power between the country’s 16 regional states and the federal government in Berlin has long been considered a hindrance to the implementation of much-needed reforms.The new deal will see the number of laws which have to be approved by the Bundesrat upper house of parliament, in which the states are represented, reduced from 60 per cent to between 35 and 40 per cent.- Nampa-AFPThe conservatives of incoming chancellor Angela Merkel and the Social Democrats (SPD) of outgoing chancellor Gerhard Schroeder are working towards a Saturday deadline to form the first “grand coalition” government in Germany since the late 1960s.The parties announced after talks that they had agreed on the issues of domestic policy, defence, agriculture, transport, raising the retirement age and Turkey’s prospective membership of the European Union.Turkey is a controversial issue because Schroeder has been a staunch supporter of attempts by the predominantly Muslim country to join the European bloc while the Christian Democrats believe a “privileged partnership” rather than full membership should be offered.But the formula agreed on clearly states that “there are no prior guarantees about the outcome” of the membership process, said Markus Soeder, the general secretary of the Christian Social Union (CSU), the Bavarian sister party of Merkel’s Christian Democratic Union (CDU).”A very diplomatic formula was found in the end,” said leading SPD official Olaf Scholz.The term “privileged partnership” will however not feature in the coalition government’s policies.A widely expected agreement was reached to raise the retirement age from 65 to 67 from 2010, CDU secretary general Volker Kauder said.Steinbrueck said there was a good chance of reaching agreement by week’s end on finding a solution to the complex issue of finance, including tax rises and savings in spending.Among the most controversial issues are proposals to raise the value-added tax and make the wealthiest Germans pay more tax, despite warnings from economists that such measures could put the brakes on a budding economic recovery.CDU finance negotiator Roland Koch said the basis for an agreement had been found.He mentioned the raising of civil servants’ weekly hours to 41, but added the SPD call for higher taxes for the better-off remained controversial.The online edition of Focus magazine meanwhile reported that both sides had agreed that value added tax will rise to 19 per cent from 16 per cent from January 1, 2007, one point higher than the conservatives had proposed in their election campaign.However, the parties have decided to put reform of the health system on hold until next year.The parties announced earlier on Monday that they had agreed a long-awaited overhaul of Germany’s cumbersome federal system.The current division of power between the country’s 16 regional states and the federal government in Berlin has long been considered a hindrance to the implementation of much-needed reforms.The new deal will see the number of laws which have to be approved by the Bundesrat upper house of parliament, in which the states are represented, reduced from 60 per cent to between 35 and 40 per cent.- Nampa-AFP