German Chancellor Angela Merkel sought on Sunday to broker a deal on tax cuts between her conservatives and the Free Democrats (FDP) and achieve a breakthrough in tricky talks to form a centre-right coalition, Reuters reported . Germany"s conservatives, including Merkel"s Christian Democrats (CDU) and Bavaria"s Christian Social Union (CSU), are trying to forge a four-year policy agenda with the business-friendly FDP after Sept. 27"s election. While the three parties have agreed on a range of issues, from basic principles on nuclear energy to financial market regulation and several areas of foreign policy, the biggest obstacle is the scale of tax cuts and how to finance them. The parties expect to clinch a final deal, which will also include the thorny issue of cabinet posts, in the next week. "I see the summit of the mountain but we have quite a difficult path ahead of us," said CSU leader Horst Seehofer, who was taking part in Sunday"s talks. Both the conservatives and FDP campaigned for tax relief but they are at loggerheads over the details, due mainly to a ballooning budget deficit in Europe"s biggest economy. Talks have focused on cuts of about 20 billion euros ($29.84 billion), which would be closer to the conservatives" election pledge of 15 billion euros than the FDP"s 30 billion euros vow. --SP
