German Chancellor Angela Merkel's conservatives have sealed a coalition deal with the Free Democrats (FDP) based on major tax cut plans.
The deal between the CDU/CSU and the pro-business FDP paves the way for the coalition to take office next week.
Income taxes will be slashed by 24bn euros ($36bn, £22bn) starting in 2011, according to the coalition agreement.
The parties agreed to unite after the September general election in which the FDP achieved its best-ever result.
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