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Germany doesn't recognize outright same-sex marriage. However, since August 1, 2001, Germany recognizes a kind of civil union of same-sex couples. This so-called Eingetragene Lebenspartnerschaft (German civil union, literally "registered life partnership") grants same-sex couples who specifically apply for it a subset of the rights and obligations connected with marriage.
On October 12, 2004 the Lebenspartnerschaftsgesetzüberarbeitungsgesetz (life partnership law revision law) was passed by the Bundestag. Now there is in some cases the possibilty of an adoption and there are the same tax benefits as in a regular marriage.
On July 17, 2002, the Bundesverfassungsgericht (German supreme court) ruled that there are no legal obstacles to giving these civil unions the same status (with the same rights and obligations) as opposite-sex marriages. The main issue ruled on that day was the constitutionality of these civil unions, which was affirmed -- but the aforesaid ruling did more than just settling the constitutional challenge, in that it actually clarified that (opposite-sex) marriages and (same-sex) civil unions could be given entirely equal status in Germany. However, despite this possibility, both unions are not currently of equal status there (see above).
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