G7 talks

Schäuble's Home Game

Schaäuble 3
The heads of the G7 in front of the Frauenkirche in Dresden.
  • Why it matters

    Why it matters

    Mr. Schäuble has repeatedly been criticized for preferring austerity over a lax budget policy. Dresden offers him another chance to convince his foreign counterparts that his way is the right way to turn the global economy around.

  • Facts


    • Dresden is playing host to a three-day summit of finance ministers and central banks from the world’s seven leading industrial nations, a bloc known as the G7, from May 27 to May 29.
    • Mr. Schäuble, who has rejected calls from his peers to ease back on austerity, invited a series of notable economists to the summit to thrash out ideas for ending Europe’s economic crisis.
    • Ministers are also expected to discuss a standardized code of conduct for the financial sector, a type of “oath” for bank employees, which is already law in the Netherlands.
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The venue was chosen with care. For German finance minister Wolfgang Schäuble, a member of Chancellor Angela Merkel’s center-right Christian Democratic Party, Dresden serves as a shining example of his firm convictions on fiscal policy.

The capital of the eastern state of Saxony, one of the wealthiest kingdoms in the German-speaking world in the Middle Ages, was famously left in ruins by Allied bombing at the end of World War II and later became part of the communist former German Democratic Republic.

In the years since Germany’s reunification in 1991, Dresden has witnessed a major transformation, an economic rise like few other cities in the former East, restoring much of its former grandeur and become one of the country’s biggest tourist attractions.

Perhaps most importantly, Dresden is debt free and has a balanced budget. Mr. Schäuble now hopes Dresden can show his counterparts around the world that it is possible to save and invest at the same time.

That is his message to the finance ministers and central bank chiefs of the seven leading industrial nations known as the G7, who since Wednesday night have been attending a three-day summit in Dresden hosted by Mr. Schäuble and Jens Weidmann, president of the Bundesbank, Germany’s central bank.

Dresden’s balanced budget comes despite spending hundreds of millions to fully refurbish its museums since German reunification. That includes rebuilding much the Dresden Royal Palace that was home to its Saxony kings, and the historic Taschenbergpalais hotel, both of which were hosting events with the finance ministers over the course of the three-day summit.

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