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Germany’s likely next coalition sketches out its plans

Berlin - The three parties likely to form Germany's next government have outlined plans for Europe's biggest economy in an initial coalition agreement, touching on issues such as the minimum wage, taxes and climate protection.

Here are the main points agreed on Friday by the Social Democrats, ecologist Greens and the liberal FDP as they enter formal coalition talks.

 

- Budget, taxes -

 

Germany's no-new-debt rule had been suspended in the coronavirus pandemic, allowing the government to borrow billions to finance its way out of the crisis.

Nevertheless, the country's likely next government -- known as a "traffic-light" coalition because of the parties' red, green and yellow colours -- plans a return to the the rule that is anchored in the German constitution.

In their initial agreement, they agreed to maintain the so-called debt brake limiting new borrowings to 0.35 percent of output per year.

Maintaining the debt brake is a red line for the FDP, and Social Democrat Finance Minister Olaf Scholz -- on track to become chancellor -- has also repeatedly said he will stick to the rule.

The parties also agreed to not raise taxes during their mandate -- a win for the pro-business FDP which has refused to raise any fiscal pressure on taxpayers.

Distribution of seats after legislative elections in Germany

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- Minimum wage, vote at 16 -

 

In return, the Social Democrats secured their electoral promise of raising minimum wage to 12 euros ($14) "from the first year" from the current 9.60 euros.

All three agreed to lower the voting age to 16 -- something likely to favour the Greens and FDP which have younger supporters as opposed to Angela Merkel's conservatives, who are largely backed by Germany's army of pensioners.

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- Climate -

 

The Greens' main win came in the form of an accelerated exit from coal energy, which is to be brought forward by eight years to 2030.

The parties also agreed to "further develop" the country's current climate protection law in 2022, and to "bring about all necessary laws, regulations and measures" on this front.

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- Sovereign Europe -

 

Foreign policy was dealt with in broad strokes in the initial document.

The parties however emphatically said they "want to raise Europe's strategic sovereignty" -- likely to please the continent's second biggest power France, which has made this a priority of its EU presidency beginning 2022.

The transatlantic relationship will remain a "central pillar" for Germany, and NATO is an "indispensable element" for the country's security, the text said.

And potentially grating to Poland or Hungary -- the parties want "an EU which protects its values and rule of law internally and externally".

North Atlantic Treaty Organization (NATO)

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