FACTBOX: German parties' plans on financial policy

BERLIN (Reuters) - German Chancellor Angela Merkel's conservatives sealed a coalition deal with the Free Democrats (FDP) on Saturday after marathon talks.

Below is what they agreed on finance policy, according to a draft coalition agreement and party officials.

TAX RELIEF

* From 2010, the parties will implement 14 billion euros ($21.01 billion) in tax relief agreed by the outgoing government. Additional corporate and inheritance tax reforms, and changes to child allowances will take the total tax relief for 2010 to an estimated 21 billion euros.

* From 2011, they plan income tax relief worth a total of 24 billion euros annually, with low- and medium-income households and families with children set to benefit most.

* Under the corporate tax reform taking effect from 2010, rules governing the deduction of interest rate payments from taxable profits will be made more attractive. Writing off losses against tax will become easier.

* Inheritance tax rules are to be simplified from 2010 with the aim of helping family owned businesses.

* Also from 2010, child benefit will be increased by 20 euros to 184 euros ($276) per month and the child tax allowance will rise to 7,008 euros from 6,024 euros now.

* Merkel has ruled out tax increases but left open the possibility that social security contributions might rise, saying the government will review the situation in 2011.

BUDGET DEFICIT

* The parties say in the draft coalition accord: "We stand for a solid budget and finance policy," adding that compliance with the European Union Stability Pact is a priority for them.

* They aim to boost economic growth to generate revenues to tackle Germany's swollen budget deficit, and say they will review all state spending.

* The parties say the state should reduce its stakes in banks and other companies as soon as possible and work must now begin on exit strategies.

FINANCIAL MARKET SUPERVISION

* The parties agree German banks will have to meet tougher capital requirements and that supervisory powers for financial markets, until now split between Germany's Bundesbank and watchdog Bafin, will be concentrated at the central bank.

* They will work "vehemently" to avoid financial market inflation risks.

* The parties back the development of a European rating agency.

* In future, no financial product, market institution or financial market may go unregulated or supervised, they say.

(Compiled by Berlin bureau staff)