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Germany

Opposition Defections Boost Chances for Tax Cut

A handful of opposition politicians have signaled they are ready to cut a deal with Chancellor Gerhard Schröder in order to approve a tax cut plan in Germany’s upper legislative chamber, adding to the number of Christian Democratic politicians who have said they will ignore the blockade plans of some opposition members. On Tuesday, Thuringia’s Premier Dieter Althaus joined his CDU colleagues from Baden-Württemberg and Bavaria in saying he was prepared to negotiate with the Social Democrats and Greens over the legislation, which would pull forward cuts in the income tax rate to 2004. However, critics within the CDU, including Lower Saxony Premier Christian Wulff, say that demands by the Christian Democrats that no more than 25 percent of the tax cut be financed through deficit spending are "more and more unrealistic," considering the country’s dramatic economic situation and sinking tax revenues. The tax cut is part of Schröder's Agenda 2010 package of reforms intended to kickstart the sputtering economy.