German coalition ups social spending ahead of vote

November 5, 2012
German chancellor Angela Merkel speaks at a regional meeting of her Christian Democratic Party in Sternberg, eastern Germany Saturday Nov. 3, 2012.  Merkel said  Europe's sovereign debt crisis will last at least five more years and the continent is on the right path to overcome the crisis but "whoever thinks this can be fixed in one or two years is wrong."    (AP Photo/dapd/ Thomas Haentzschel)
German chancellor Angela Merkel speaks at a regional meeting of her Christian Democratic Party in Sternberg, eastern Germany Saturday Nov. 3, 2012. Merkel said Europe's sovereign debt crisis will last at least five more years and the continent is on the right path to overcome the crisis but "whoever thinks this can be fixed in one or two years is wrong." (AP Photo/dapd/ Thomas Haentzschel)

BERLIN (AP) — Germany's center-right coalition says it will increase childcare benefits and end an unpopular medical charge less than a year before a general election.

The coalition of Angela Merkel's Christian Democrats, their Bavarian sister party and the pro-business Free Democrats announced the changes early Monday after late-night talks.

The three parties also agreed to do more to help impoverished retirees, increase spending on transportation projects and aim for a structurally balanced budget by 2014.

Germany has weathered Europe's economic crisis well and the government has reported record tax revenues this year.

Opposition parties described the new measures as expensive presents to voters ahead of next year's poll in which Merkel will stand for a third term.