FACTBOX-Germany's FDP agrees election manifesto

HANOVER, Germany May 17 (Reuters) - The liberal Free Democrats (FDP), Germany's main opposition, on Sunday agreed their party programme for September's federal election.

The pro-business FDP has been the biggest political winner from the financial crisis. Polls show it could win enough votes at the election to take power with Chancellor Angela Merkel's conservatives, who now share power with the Social Democrats.

For a story on FDP leader Guido Westerwelle promising tax cuts please double click on [ID:nLF158122]

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Following are details of the FDP's election manifesto:

TAXES

The FDP plans tax cuts aimed at families and middle income earners worth up to 35 billion euros ($47.40 billion). The party wants to simplify the tax system and shift to a three-band system, with rates of 10 percent, 25 percent and 35 percent. The top rate would only apply to income over 50,000 euros. A ban on net new borrowing for the federal government, states and communities would aim to stabilise the budget situation. The FDP only wants to allow exceptions to this in emergencies.

FINANCIAL SUPERVISION

The Bundesbank would take over full responsibility for banking supervision, which it now shares with the BaFin financial watchdog. The FDP also wants to stop risks being shifted off balance sheets.

ECONOMIC POLICY

The FDP wants to strengthen the so-called Mittelstand small- and medium-sized businesses that form the backbone of the German economy. It is proposing business tax rates of 10 and 25 percent. Rules on protecting workers from dismissal would be loosened. Restrictions on incurring losses to finance takeovers would be abolished.

FOREIGN POLICY

The FDP favours a round of disarmament and wants any remaining U.S. nuclear weapons removed from Germany. The party regards the United States as Germany's most important ally outside Europe and opposes cosy relations with Russia, which it accuses of human rights breaches. The FDP supports Germany's military deployment in Afghanistan, and believes Turkey is not ready for EU entry in the coming years.

CIVIL LIBERTIES

The FDP criticizes what it sees as the limitation of civil liberties in the fight against terrorism. The party wants to strengthen citizens' rights against state intrusion. (Reporting by Sabine Siebold; Writing by Paul Carrel; Editing by Louise Ireland)