German leaders agree economy crisis measure

Germany’s two biggest political parties reached an agreement on increasing value-added tax, a conservative official said, apparently resolving one of the toughest remaining obstacles to forming a left-right ”grand coalition” after weeks of negotiations.

However, the two sides remained apart on other key issues after talks that lasted into the early hours of today. They hoped to secure a deal later today, or at the latest tomorrow, to put conservative Angela Merkel in the chancellery in an alliance with outgoing Chancellor Gerhard Schroeder’s Social Democrats.