Germany's federal coalition on Tuesday announced a compromise deal to alter draft legislation that appears to defuse the latest policy dispute within the three-party alliance. 

It follows emergency negotiations on Tuesday between leading figures from all three governing parties, with Chancellor Olaf Scholz of the Social Democrats, his deputy Robert Habeck of the Greens, and Finance Minister Christian Lindner of the FDP. 

The compromise will involve providing homeowners more time to convert from oil or gas heating to ensure they are not overburdened financially, and also to try to ensure renters will not face cost increases they can't immediately bear. 

While the Greens were keen on a more aggressive strategy to phase out oil and gas heating, replacing it with systems powered primarily by electricity sourced from renewable energies, more conservative opposition forces in Bavaria last weekend were out in force protesting this bill.

Revised draft law to be introduced to parliament this week

The precise details aren't entirely clear, though, as it involves redrafting a bill that had once been approved by the federal Cabinet, but which the FDP later objected to, arguing it could prove too costly in some parts of the country. 

The original bill was overdue for a first reading in the Bundestag Parliament but the FDP blocked this. Now, the coalition hopes to put the law before the Bundestag, starting this Thursday, and to secure its passage before the summer break begins in July. 

On paper, the law is scheduled to come into force on January 1, 2024. But there was already scope to go past that deadline under certain circumstances, and these now seem likely to be expanded further. According to the preliminary announcement on the compromise, the hard limit of the start of 2024 is now likely to apply only to new constructions. 

Those new buildings will require that heating systems are powered at least 65% from renewable-sourced electricity. 

Coalition disputes cast government's stability into question

It's one of several recent arguments between the pro-business Free Democrats on one side, who are more wary of government overspending and notably hold the purse strings with party leader Christian Lindner in the Finance Ministry, and the bulk of the more left-leaning Social Democrats and Greens on the other. 

Other disputes include issues such as how much the federal government should spend helping local authorities deal with migration and asylum-seekers, and whether and by how much to subsidize electricity prices for heavy industry. 

The latest compromise, assuming FDP members will support it in an eventual vote in parliament, should mean one of the government's core climate change policies does not face a major delay. 

msh/jsi (AFP, dpa, Reuters)

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