Berlin  - Chancellor Angela Merkel's Christian Democrats (CDU) approved the new government coalition deal with the Free Democrats (FDP) at a party conference on Monday, paving the way for a new centre-right government to take office later this week.

Merkel told her party that the proposals agreed with the FDP would work to counter the economic crisis, and warned that the country's future remained unpredictable.

"This is why we have decided to follow a path that focuses entirely on growth," the CDU-leader said, adding that this justified an increase in public debt.

Key points of the coalition agreement are 24 billion euros (36 billion dollars) in tax cuts, an overhaul of health care funding and a reduction in compulsory military service from nine to six months.

Of the 91 CDU delegates, 89 approved the coalition document and 2 abstained.

The FDP endorsed the coalition deal on Sunday, after three weeks of negotiations concluded early Saturday.

The CDU's Bavarian Christian Social (CSU) sister party was also due to rubber stamp the deal at a party conference on Monday.(dpa)