GERMANY: Germany's grand coalition government hopes to boost the country's faltering birth rate with a new allowance offering 14 months' paid leave for stay-at-home parents.
The so-called "parents' allowance" gives the stay-home parent 67 per cent of their income for 12 months - up to €1,800 monthly.
Another two months' allowance will be paid if the other parent - in most cases the father - takes two months off work as well.
Unemployed parents will receive €300 a month.
Family minister Ursula von der Leyen, who championed the parents' allowance despite loud protests from the ranks of her own Christian Democrats (CDU), said she was "thrilled" that agreement had been reached.
"It creates a protected space in the first year so that fathers and mothers can take time for their children without financial pressures," she said.
Agreement was reached on the parents' allowance and "rich tax" during a four-hour negotiation session between the CDU and the Social Democrats (SPD) which ended in the Chancellery in the early hours of yesterday morning.
SPD general secretary Hubertus Heil called the allowance a "paradigm-shift in family policy". He said: "It will support families who have children and help those who want children to take a decision to have them."
The allowance payments - costing about €25,000 per couple or €3.8 billion a year in total - will be introduced next January and financed partly by a new 3 per cent "rich tax" on top earners.
As of January, the tax rate for single people earning more than €250,000 and couples earning over €500,000 will increase from 42 to 45 per cent.
SPD chairman designate Kurt Beck said he was satisfied with the agreement; the parents' allowance was conceived under the last SPD-led government and the wealth tax was a key SPD election proposal. "This was our will because, after asking a lot of people, now those with top incomes have to make an extra contribution," said Mr Beck.
The CDU agreed to the rich tax only after special exemptions for business earnings. The full details will be worked out and included in a corporate tax reform plan due in 2008.
The coalition partners have also agreed a compromise on a new anti-discrimination law. EU guidelines protect from discrimination on grounds of race, ethnic origin or gender, but the German law will go farther after the CDU dropped its objection to adding sexual orientation to the criteria.
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