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Leaders from Germany's main parties signed provisionally a coalition agreement on Wednesday, paving the road for forming a new government two months after a federal election.
German Chancellor and Christian Democratic Union (CDU) President Angela Merkel signed the agreement with her counterparts from CDU's Bavarian allies Christian Social Union (CSU) and its main rival Social Democratic Party (SPD) in Berlin.
The agreement was reached after negotiations lasting 17 hours, and consisted of various future policies including national minimum wage, dual citizenship, highway tolls for foreign autos, as well as government spending and energy transition reforms.
"We are a large coalition, we will be able to keep and implement the central promises that we made during our campaigns," said Merkel in a press conference.
Merkel's conservative bloc of CDU and CSU resisted pressure from the center-left SPD on raising taxes for the rich during negotiations. According to the agreement, a new government would spend an additional 23 billion euros (31.2 billion U.S. dollars) by 2017 without tax increases.
The government would also not make new borrowing from 2015. The additional money would be invested in areas including infrastructure, education, research and development.
"We do not want to raise taxes. This is good for the middle class, for the small business, and for those who create jobs in our country," said Merkel.
SPD kept its promise to introduce a universal minimum wage nationwide. From January 2015, a national statutory minimum wage of 8.50 euros per hour will be introduced in Germany.
Other agreed policies included allowing dual citizenship, lowering retirement age from 67 to 63 for those who made pension contribution for 45 years, charging highway tolls for foreign drivers and reforming the current Renewable Energy Act.
Both sides also agreed on pushing for a European level financial transaction tax and structural reforms in European Union member states in order to improve their competitiveness and growth. "Germany can only do well if Europe has a good future," read the agreement.
The agreement paved road for forming a new government after the parliament election in September. Merkel's bloc failed to win a majority in the new parliament, and has to find a partner in order to continue ruling the Europe's largest economy for the next four years.
The agreement has to be approved by SPD's some 470,000 members, if a so-called "grand coalition" as in Merkel's first term as chancellor from 2005 to 2009 were to be formed.
SPD leaders are scheduled to cast a ballot in mid-December. SPD's president Sigmar Gabriel seemed confident that the agreement would finally be approved.
"We will find a wide majority," said Gabriel. "The members of the SPD will be proud of what we have achieved for the people of Germany in the coalition agreement," he said.
