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Europe German parties put together deal for new ‘grand coalition’

CHANCELLOR Angela Merkel’s conservatives and the Social Democrats (SPD) sealed a preliminary agreement on a new coalition today.

SPD leader Martin Schulz, who had previously ruled out cobbling together another “grand coalition,” said that the terms of the deal represented “outstanding results.”

However, Mr Schulz still needs to win over a special party congress on January 21 and win a ballot of all SPD members.

The previous SPD coalition with Ms Merkel’s Christian Democrats is blamed for the party achieving its worst result since the second world war at last September’s election, with 153 seats.

Today’s agreement noted that the election result, at which the Christian Democrats lost 65 of their 311 seats, showed “many people were dissatisfied.”

The SPD left wing will remain dissatisfied, however, with demands including raising the top rate of income tax, greatly expanding public health insurance at the expense of private schemes and reuniting refugee families all ditched.

The document contains a long section on Europe, pledging that the government will help with French President Emmanuel Macron’s proposed integrationist reforms to the EU.

The BDI bosses group had called for changes to the eurozone yesterday, wanting it “driven forward with a strong voice from Berlin.”

The BDI also urged tax cuts, including to the “solidarity surcharge” income-tax top-up, and a response from Berlin to deep tax cuts in the United States.

The preliminary coalition agreement pledges the parties to push for “fair taxation of big companies” and calls for minimum rates of corporation tax, though what this means in practice is left unspecified.

It also sets out a crackdown on migration into Germany, which has been pushed hard by Ms Merkel’s Bavarian sister party, the Christian Social Union.

The document states that the number of new asylum-seekers shouldn’t exceed a range of 180,000-220,000 annually.

And there will be a limit of 1,000 per month on the number of close relatives allowed to join refugees in Germany who are granted a status short of full asylum.

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