Oct. 22 (Bloomberg) -- Chancellor Angela Merkel’s ruling bloc and the Free Democratic Party huddled for a final stretch of negotiations in Berlin today, aiming to unveil an agreement for Germany’s new government in the next 48 hours.
Merkel’s Christian Democrats, her Bavarian Christian Social Union sister party and the FDP must now wrestle over six pages of disagreements involving tax cuts and how to fund rising health costs, CSU General Secretary Alexander Dobrindt said.
“At the moment it’s there in black and white and it’ll have lots of red ink,” Dobrindt told journalists. The 27-member negotiating team plans to finish talks tomorrow or the next day.
The coalition partners’ proposal to create a debt fund to plug a hole created in the budget by rising unemployment and health-insurance costs has already met with criticism. Opponents say a special fund outside the budget would cloak the state of Germany’s public finances.
“It’s not trickery,” FDP economy expert Rainer Bruederle told reporters as he entered the talks, responding to a question about whether the plan was a form of fiscal sleight-of-hand.
A completed agreement would have to be approved by party congresses, already scheduled for Oct. 25-26. Once an agreement is signed, Merkel could be voted into her second term on Oct. 28, the day after the lower house of parliament, or Bundestag, meets for the first time since last month’s election.
Merkel and her negotiating partners are seeking to reconcile their promises for tax cuts with an expanding deficit and new rules that limit the government’s ability to take on debt.
The FDP called for 35 billion euros ($52.5 billion) in tax cuts in its election campaign. Merkel’s bloc offered 20 billion euros in negotiations last week.
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