Banging champagne corks for Europe’s debt community? German Ministry of Finance goes to Social Democrats “soft mediator”

Gone are the years of the Iron Austerity-general Wolfgang Schäuble (save where you can, no new debt!). Yanis Varoufakis and all the other debtors couldn’t get past him. He was the rock in the swell, especially for the Nordic countries in the euro zone, which thought the same way like Schäuble. He stood firm against the efforts of the southerners to keep a firm hold on the debt organ.

And those who are too annoying, and who stands too much in the way of consensus, will be transported uphill. As a rule, such people in german politics then move to Brussels (EU Commission), where they disappear well paid in the bureaucracy jungle. But Wolfgang Schäuble, however, was promoted to the top in Berlin and is now president of the german Paliament “Bundestag”. Behind the german President Frank-Walter Steinmeier, Schäuble is thus formally number 2 in the official line of the most important political functions, ahead of the number 3 Angela Merkel.

But let’s face it, this number two is nothing more than a formality. From now on, he presides over meetings in the Chamber, takes care of formalities and occasionally speaks on democracy and the importance of parliamentarianism. Maybe he wanted to be less hectic even at a high political age? Anyway, Schäuble’s out of active politics.

The cramped compromise

The SPD (Social Democrats) actually wanted to join the opposition with 1000% certainty. Well, now they´re in a great Coalition again. They get a big bonus for agreeing to the Coalition. The bonus is the Ministry of Finance. The names of the ministers will only be published once the SPD base has actually agreed to the GroKo compromise. Always assuming that it does, this is a major turning point in German financial policy. We are now likely to move away from the strict black zero, and a little more towards more expenditure, more “flexibility” and consideration for European partners who would like to push the debt pump.

Olaf Scholz the soft Mediator

The actual mayor of Germany´s second largest City Hamburg Olaf Scholz (SPD member) is likely to become the new finance minister and vice-chancellor, according to unanimous media reports. This would give him free reign in financial matters for the most part. For Mummy Angela Merkel it´s anyway only important that she remains chancellor – who cares about content! Scholz is considered the “butter-soft mediator”. The main thing for him are compromises, no clear opinions, never take your own clear standpoints! So far, Scholz had ruled Hamburg in dead silence as a mayor. No ideas, no corners and edges, but a dead-moderation of all important issues. So there was nothing which he could do wrong in Hamburg.

This profile of the presumably new German Finance Minister is likely to play into the hands of the Mediterranean countries when calm and gentle mediator Scholz will soon meet Greek and Italian Finance Ministers in Eurogroup meetings in Brussels, who have quite different things in mind. Debt making, softer debt criteria, more flexibility in bank bailouts and so on! By the way, just a few minutes after today’s announcement of the old/new Great Coalition in Germany, Italy’s Prime Minister Paolo Gentiloni congratulated on the coalition agreement. Has he noticed that the Eurogroup meetings of finance ministers will be much more pleasant for his country in the future?


Olaf Scholz. Photo: Olaf Kosinsky / Wikipedia (CC BY-SA 3.0 de)

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