MESEBERG, Germany (Reuters) – Germany’s coalition government reached an agreement on Tuesday, after weeks of negotiations, on tax cuts for SMEs totaling 7 billion euros, to revive a struggling economy of speed.
Two weeks ago, this project called “law on growth opportunities” could not be ratified by the three parties in power in Berlin – social democrats, Greens and liberals of the FDP – because of the demands of the minister of the Lisa Paus family, an ecologist, who demanded 12 billion euros for new social assistance for children.
A compromise was finally reached between the three parties during a two-day seminar at Meseberg Castle to limit this aid to 2 billion euros, paving the way for an agreement on tax cuts for a period of four years. .
According to this text, which Reuters was able to consult, the shortfall for the federal state will be 2.6 billion euros in the first year, 2.5 billion for the Länder and 1.9 billion euros for local authorities.
The law, defended by the Minister of Finance and boss of the FDP Christian Lindner, includes a set of tax measures intended mainly for SMEs and should encourage them in particular to invest in climate protection and research, in exchange for tax cuts.
The German economy stagnated in the second quarter after two quarters of decline over the winter.
(Andreas Rinke, Maria Martinez, with contributions from Matthias Williams, Jean-Stéphane Brosse, edited by Blandine Hénault)
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