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Germany

Opposition Won't Block Pension Reform

The new pension taxation plan will probably go into effect as planned on January 1, 2005: Opposition politicians said they would not strike down the new law when it comes up for vote in the upper house of parliament, where they have a majority. However, a spokesman for the Christian Democratic Union said lawmakers would vote against the plan in the Bundestag this Thursday as a means of protest against what they sees as faults in the plan. According to the plan, pensions will be taxed increasingly, until they are fully taxed by 2040. But payments for old-age care will be tax free. CDU leader Volker Kauder told news agencies on Tuesday that the opposition CDU and CSU would vote against the Red-Green proposal in the lower house this Thursday, but that they would not let the law meet its demise at a vote in the upper house next week.

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