Update:Germany’s Upper House Blocks Government’s Tax Cut Bill

–Adds Announcement Of Mediation Process To Story Sent At 09:06 GMT

BERLIN (MNI) – Germany’s upper house of parliament, the Bundesrat
representing the 16 regional states, on Friday blocked the government’s
tax cut bill.

The bill needs to be passed by both houses of parliament.
Chancellor Angela Merkel’s center-right CDU/CSU-FDP coalition only
controls a majority in the lower house, the Bundestag.

The government announced after the rejection of its bill that it
will now start a formal mediation process with the upper house to reach
a compromise on its tax cut plans.

The government bill foresees a cut of income tax rates in two steps
on Jan 1, 2013 and Jan 1, 2014. The tax cuts together would lead to
revenue losses of some E6.1 billion per year.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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