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Olaf Scholz: From “Scholzomat” to Merkel's Vice Chancellor - and now to the Chancellery despite cum-ex turmoil?

2021-04-28T05:39:26.677Z

Federal Finance Minister Scholz is considered the most experienced of the candidates. Highly praised as the inventor of short-time work benefits, he is also involved in financial scandals.



Federal Finance Minister Scholz is considered the most experienced of the candidates.

Highly praised as the inventor of short-time work benefits, he is also involved in financial scandals.

Berlin - With Olaf Scholz, the SPD wants to return to the Chancellery after the federal election in 2021.

Within the party, it's a balancing act: after a complicated process, the Social Democrats had chosen the party left Norbert Walter-Borjans and Saskia Esken as the new chairmen at the end of 2019 - the rather conservative Scholz failed.

And, 16 years after Gerhard Schröder, it should again achieve the great success in the election.

Despite some ballast from the past.

Olaf Scholz: From the “Scholzomat” of Agenda 2010 to Vice Chancellor

Scholz has undergone a change: Political observers note that Scholz was assigned to the left wing at the beginning of his term, but in the course of time he assumed more and more conservative views. As SPD general secretary at the latest in Agenda 2010 times, he received the ironic nickname “Scholzomat”. The reason: Scholz's answers always followed the party line stereotypically, as the

Saarbrücker Zeitung

noted. Scholz confirmed the impression a few years ago to the

world

. For the survival of the SPD it was necessary to be “absolutely loyal to the Chancellor and the SPD”.

Born in 1958 in Osnabrück, the politician studied law and has been a member of the SPD since 1975 - back then as a lawyer and (from today's perspective hardly recognizable) with curly hair.

His political career led him from the post of Senator for the Interior in Hamburg, to the SPD General Secretary to the office of Federal Minister for Labor and Social Affairs between 2007 and 2009.

From 2011 to 2018 he was First Mayor of Hamburg - one of his scandals is linked to this post.

He then switched back to federal politics.

Scholz has been Minister of Finance and Vice Chancellor since 2018.

Accordingly, one can hardly blame the SPD candidate for a lack of political experience.

Chancellor candidate in the federal election 2021: The most important achievements of Olaf Scholz

The SPD man has earned a few merits in his career: Scholz is one of the inventors of short-time work benefits. The 2007 financial crisis coincided with his tenure as Federal Minister of Labor. The aim of the measure is to reduce unemployment to a minimum and to avoid redundancies. During the corona crisis, the federal government reintroduced short-time work benefits. Numerous countries followed suit because of the success story, including Switzerland, Italy and Great Britain. “Solidarity makes you strong. Short-time work is one of the most important ways of exercising solidarity, ”explained Scholz himself. This ensures that work and employment are guaranteed despite declines in demand and production.

In the current corona crisis, many Scholz credit the fact that he quickly provided the financial means for an economic stimulus package.

"We want to get out of the crisis with a bang," said Scholz about the targeted assistance.

The first package from the federal government had a volume of 130 billion euros.

Scholz is also an advocate of a financial transaction tax.

This idea was first proposed by the economist John Maynard Keynes and developed further by James-Tobin as the "Tobin Tax".

However, there are both supporters and opponents of the introduction of this financial instrument.

Scholz goes into the election campaign with a mortgage: Wirecard and Cum-Ex scandals

As finance minister, Olaf Scholz is one of the most important witnesses to the Wirecard scandal and the cum-ex scandal.


The Wirecard scandal shook the Federal Republic of Germany in 2020. The financial services provider Wirecard has long been the darling of the financial markets. The share rose to almost 200 euros and many private investors were also invested. But the good numbers - as it turned out in 2020 - were due to falsification of accounts and market manipulation. When this became known, the stock fell to less than one euro and many investors lost their entire investment.

The auditor Ernst & Young examined the finances in 2018 and found them to be flawless.

Even the state supervision BaFin (Federal Financial Supervisory Authority for Financial Services) had no doubts about Wirecard's balance sheet for a long time.

This lack of control impaired confidence in Germany as a financial center.

Because in the 2019 balance sheet, Ernst & Young finally found that 1.9 billion euros were simply missing.

This amount made up around a quarter of Wirecard's total assets.

Chancellor candidate Scholz: "The federal government is not responsible for this fraud"

Another detail: At the beginning of 2019, the

Financial Times newspaper

reported on fraud at Wirecard. As Federal Minister of Finance, Scholz is involved in the scandal. Because the control of BaFin is in his area of ​​responsibility. A committee of inquiry should clarify the extent to which he bears political responsibility. Scholz himself does not see the responsibility with the federal government.

The SPD chancellor candidate describes the machinations of the Wirecard board as "gang crime".

He wants to do everything possible to clear this up and to ensure that these things do not happen again in Germany.

Germany should therefore get the "best financial supervision in the world".

Scholz also wants to reorganize BaFin and is appointing a new boss for this purpose.

The auditing firms are also to be targeted again.

It is foreseeable that the Wirecard issue will pursue the candidate through his election campaign.

The opposition in particular is critical of his role.

But another explosive financial scandal falls during his term of office: the cum-ex scandal.

SPD chancellor candidate Olaf Scholz and the cum-ex scandal

In

2018, the

Correctiv

research center

uncovered widespread tax evasion through which the German tax authorities lost billions. Basically, it's a trick for trading stocks with (cum) and without (ex) dividends. The fraudsters moved the securities so often that the tax authorities could no longer trace who the papers belonged to and when. By cleverly exploiting the tax loophole, the fraudsters were repeatedly reimbursed the capital gains tax - at the expense of the German taxpayer.

The real scandal: The Ministry of Finance is said to have known about it since 2002. But even though the tax loophole was officially closed in 2012, a similar scam remained possible. As the former First Mayor of Hamburg, Scholz finds himself in distress in the cum-ex scandal. As mayor, he is said to have met a head of the private bank MM Warburg more often, according to research by the

Süddeutsche Zeitung

. Scholz initially kept silent about these meetings. The bank is considered to be one of the actors in the illegal cum-ex deals. Scholz also missed reclaiming the sum of 47 million euros from the bank. The claims are now statute-barred.

The SPD is betting that none of these accusations will play a major role in the election campaign. With one step, the party could have given Scholz and itself a strategic advantage: it nominated its candidate for chancellor as early as 2020, long months ahead of the Union and the Greens. At least in spring 2021, Scholz's competitors Armin Laschet and Annalena Baerbock in particular came into the media's critical focus.

Source: merkur

All news articles on 2021-04-28

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