Poacher turns gamekeeper

From Goldman Sachs to Germany’s Finance Ministry

main 32841538 imago – Joerg Kukies jorg a German deputy finance minister Goldman Sachs banker Olaf Scholz SPD Social Democrat young ministry
Moving into the Finance Ministry in Berlin. Source: Imago

When Olaf Scholz, Germany’s new finance minister since March, made one of his first trips abroad to Canada, journalists were more interested in one of his deputies. Reporters constantly flocked to Jörg Kukies, one of six deputy ministers in the finance department.

Kukies is an oddity in Angela Merkel’s government of her conservative Christian parties and the junior coalition partner, the Social Democrats. The 50-year-old is a highly successful banker who took a massive pay cut to enter political life and became one of the representatives of the center-left Social Democrats (SPD) at the Finance Ministry. His salary fell from an estimated €1 million ($1.2 million) to €160,000 per year.

Kukies was not just any old banker. Before moving into his spartan ministerial offices, he was co-head of Goldman Sachs’ German operations. Earlier, he had led the investment bank’s stocks business in Germany and Austria and managed derivatives operations for Europe, the Middle East and Africa.

The move into politics cause many to raise an eyebrow. The man who once made his living in financial markets now is tasked to help regulate the financial markets and prevent a meltdown as seen in 2008, when Lehman Brothers collapsed.

Portrait Jörg Kukies Goldmann Scholz finance ministry main source Association for the Promotion of the McCloy Scholarship Program
Very happy to take a pay cut. Source: Association for the Promotion of the McCloy Scholarship Program

For Kukies, those questions about his career are a symptom of German narrow-mindedness. In other countries, he says, it’s not a big deal: Lots of people cross boundaries in the course of their careers. And he is far from the only Goldman Sachs executive to move into public office – Mario Draghi, the current president of the European Central Bank, and Steven Mnuchin, US Treasury secretary, are both Goldman alumni. Steve Bannon, President Trump’s former advisor, is another senior Goldman executive who has switched to the political world.

While government may be a new world to Kukies, he is no stranger to politics. Before training as an economist, Kukies was a leading member of the Young Social Democrats, in the 1980s. At the time, he was chair of the party’s youth wing in the state of Rhineland-Palatinate. Harald Christ, a businessman, remembers him in jeans and a leather jacket, making a fiery speech in favor of abolishing nuclear power. This is now government policy but back then, it was a radical position.

Andrea Nahles, now SPD leader, recalls his enthusiasm for motorbikes when she met him when she was leading the Young Social Democrats. They became friends and undertook some motorbike tours outside Paris, where Kukies studied economics in the early 1990s. His link to Nahles undoubtedly helped him to become a deputy of Finance Minister Scholz.

In the echoing corridors of the federal finance ministry, the word on the new minister is mostly positive. Civil servants are impressed by his real-world credentials, which include a degree from Harvard University and a Ph.D. in finance from the University of Chicago. Kukies is no party hack or backroom lawyer; he’s a highly qualified economist with vast experience.

Rigorous and demanding

This is reflected in his working style, his ministerial colleagues say. He can be unconventional, and likes to get a wide range of outside policy advice, both from business and academia. But he also likes the rough and tumble of debate: Even with a busy schedule, he is always happy to field questions after speeches, sometimes tough ones.

Former Goldman Sachs colleagues say he had a tendency to micro-manage. Ministerial aides say he is a rigorous, demanding boss; unsurprisingly, he can be impatient with the sluggish pace of bureaucracy.

Leading Social Democrats like to remind audiences of Kukies’ political past. It counteracts the impression that he was parachuted into office straight from the Goldman Sachs C-suite. Colleagues from his early political life say that Kukies hasn’t really changed all that much. Rudolf Scharping, later a leader of the SPD, says that even then Kukies was “hard-working, businesslike and focused on solutions.”

Within the party, many are delighted to have enticed Kukies away from the summit of investment banking and into public service. He can make a real difference, they say: “No doubt about it: you can regulate those markets a lot better if you once were part of that world,” says an old colleague.

A version of this article originally appeared in the business weekly WirtschaftsWoche, a sister publication of Handelsblatt Global. To contact the authors: benedikt.becker@wiwo.de, sven.boell@wiwo.de and elisabeth.niejahr@wiwo.de

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