German Election

Jockeying for Finance Post

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German Finance Minister Wolfgang Schäuble, shown with IMF chief Christine Lagarde, has relished his role on the international stage. Source: Reuters

German Finance Minister Wolfgang Schäuble may be a victim of his own success. The veteran Christian Democrat, who turned 75 on Monday, has with his two terms in the post further enhanced the authority of what many already saw as the most powerful cabinet post after the chancellorship itself.

Now after eight years as point man for Europe in mastering the financial crisis and the European debt crisis, Mr. Schäuble is facing stiff competition to keep his post for a third term. Potential coalition partners for Chancellor Angela Merkel’s fourth government are already eying the finance post as a bargaining chip and even a deal-breaker.

For most of Germany’s postwar history, coalition partners have been happy to take the Foreign Office and vice chancellorship as the price for joining a coalition, no matter how few deputies they had in the Bundestag, Germany’s parliament. Hans-Dietrich Genscher, the Free Democratic leader who first made Social Democrat Helmut Schmidt chancellor and then switched to Christian Democrat Helmut Kohl, retained his posts as foreign minister and vice chancellor virtually without interruption for 18 years.

“The FDP should not enter into any coalition in which it doesn’t name the finance minister. ”

Alexander Hahn, FDP official

But with the euro and the European Union now occupying center stage, it is the job of finance minister that carries the most clout and the most prestige. Mr. Schäuble has visibly enjoyed being primus inter pares in European forums and essentially representing Europe in the International Monetary Fund, the Group of 20, and other international forums.

In Ms. Merkel’s current coalition government with the Social Democrats, Sigmar Gabriel and Frank-Walter Steinmeier, the two top leaders of the party, were content to share the two traditional coalition posts, with Mr. Gabriel becoming foreign minister in addition to vice chancellor only after Mr. Steinmeier relinquished the cabinet post to become Germany’s president.

Mr. Schäuble has let it be known he wants to keep the finance job, but the potential coalition partners – the Social Democrats, the Free Democrats and the Greens – have also openly hinted that they may lay claim to the powerful post. The finance minister is responsible for German budget and tax policy, a power which Mr. Schäuble has used to run a surplus since 2014, but the veteran Christian Democratic politician has dramatically raised the position’s international profile, too.

A grand official ceremony in his parliamentary district marked Mr. Schäuble’s birthday, with Ms. Merkel hailing her party colleague and right hand as a committed European. But after years of an ambivalent and sometimes contentious relationship, she also wished him time to spend with his family, encouraged him to try new things, and hoped he would enjoy reading the complete works of Dietrich Bonhoeffer that she gave him as a gift.

Perhaps tellingly in the color codes Germans love in their politics, Ms. Merkel wore yellow and black to the ceremony, the code for a coalition between her Christian Democrats and the Free Democrats (FDP).

Even as the distinguished guests gathered to celebrate Mr. Schäuble’s birthday, FDP official Alexander Hahn told Bild-Zeitung, “The FDP should not enter into any coalition in which it doesn’t name the finance minister.” Party leader Christian Lindner said over the weekend that the Finance Ministry was the only cabinet post “at eye level” with the chancellorship. Longtime FDP official Werner Hoyer, currently president of the European Investment Bank, is seen as their candidate for the post.

The Social Democrats, for their part, must pretend during the campaign that there is no question of renewing the grand coalition between Germany’s two biggest parties. Nonetheless, party leaders have let it be known that if it does come to that, they will be laying claim on the finance ministry, too. Ditto for the Greens, who find the austerity policies of both Mr. Schäuble and the FDP too harsh.

The question then becomes what to do with Mr. Schäuble. Ms. Merkel has already blocked his accession to the presidency once before and now that Mr. Steinmeier, a youthful 61, is installed in that post, Mr. Schäuble is not likely to get another shot.

He has already been interior minister twice in different governments and that job is now deemed too junior for someone of Mr. Schäuble’s stature. In fact, the only other cabinet post of sufficient importance is the Foreign Office, which should be available if the coalition partner gets the Finance Ministry. It is one of the few top offices Mr. Schäuble hasn’t held, and would keep him in a significant international role. He would no doubt enhance the authority of that post much as he has for the finance job.

Until a bullet from a would-be assassin confined him to a wheelchair in 1990, Mr. Schäuble was widely considered chancellor material. Although he remained loyal and forceful in his subsequent political career, a certain air of bitterness has accompanied him. This week’s birthday celebration with high praise from Ms. Merkel as well as European Commission President Jean-Claude Juncker visibly moved him.

Mr. Schäuble is campaigning once again for his seat in parliament, as he has successfully done since 1972. There are other honorific titles he could lay claim to due to his seniority, or he could serve as a simple backbencher, though it is highly unlikely he would settle for this.

Ultimately, it will be up to Ms. Merkel to decide how much she is willing to push for him to keep his post. For all her kind words at the birthday ceremony, the chancellor has proved herself remarkably dispassionate when it comes to cabinet posts. Mr. Schäuble himself has grown silent in recent weeks regarding his preferences.

In a campaign where many voters tell pollsters they have yet to make up their minds, there is some room for surprise in next week’s election. But Ms. Merkel’s grip on the chancellorship is a virtual certainty, even as Mr. Schäuble’s hold on the Finance Ministry has become problematic.

Martin Greive is a reporter, Jan Hildebrand covers financial policy, and Thomas Sigmund is bureau chief in Handelsblatt’s Berlin office. Darrell Delamaide, Handelsblatt Global editor based in Washington, DC, adapted this article into English. You can reach the authors at  m.greive@vhb.de, hildebrand@handelsblatt.com, sigmund@handelsblatt.com

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