German liberals to side with government on tax relief bill, letter shows

Germany's Free Democrats (FDP), which moved into opposition with the collapse of Chancellor Olaf Scholz's coalition last month, will support legislation to offset the burden of inflation on taxpayers, according to a letter seen by Reuters on Friday.

While still in government, the liberal FDP had pushed for an adjustment in taxation to prevent a creeping effect on wages hit by high inflation, arguing that price pressures were eating into people's take-home pay.

"We understand your letter to mean that you are serious this time," FDP leader Christian Lindner and parliamentary faction head Christian Duerr wrote in response to a plea by Scholz to help his now-minority government pass the legislation.

"Our heartfelt request is therefore that the tax relief is not tied to conditions or linked to demands for new bureaucracy," they added.

Under pressure to spur Germany's ailing economy, Scholz fired then-finance minister Lindner in November, ending months of rowing over government spending and setting the stage for snap elections in February.

The tax relief bill can be passed in the Bundestag lower house next week, together with another bill to increase child benefits, according to the FDP letter.

The coalition had previously planned to raise the benefit by 5 euros ($5.24) per month to 255 euros.