FDP Conditionally Supports SPD, Greens on Tax Relief, Child Benefits Before Election

Dec 13, 2024, 12:08 PM

The former traffic light coalition parties in Germany, consisting of the Social Democratic Party (SPD), the Greens, and the Free Democratic Party (FDP), have reached an agreement to pass legislation aimed at providing tax relief and increasing child benefits before the upcoming federal election. This decision comes despite the dissolution of their coalition, with the FDP signaling its willingness to support the draft law alongside the SPD and Greens. The proposed changes include adjustments to compensate for the 'cold progression' in income tax, where inflation pushes taxpayers into higher tax brackets without an actual increase in real income, and an increase in child benefits. The FDP's support is conditional on the removal of criticized bureaucratic costs for companies from the original proposal, which has now been agreed upon.