German coalition talks nearly failed over tax policy

Coalition talks between the Union and SPD nearly failed due to a last-minute financial dispute over tax policy. The SPD's surprise proposal for tax increases angered the Union, leading to threats. Reportedly, the conflict centered on the SPD's unexpected proposal for tax increases. Friedrich Merz, CDU leader, considered appealing to the Federal President if talks collapsed. Negotiations stalled, with the parties meeting separately. A compromise was reached through individual discussions. The SPD dropped tax increase demands, while the Union agreed to postpone corporate tax cuts and maintain a solidarity surcharge. The coalition agreement faces confirmation by CDU and SPD members.