Schaeuble Seen Keeping Finance Post Even in SPD Coalition

Germany's Finance Minister Wolfgang Schaeuble
Wolfgang Schaeuble, Germany's finance minister, now is “in good health and hungry” to remain in his post for another four years, Volker Kauder, the CDU parliamentary caucus leader, said in an Aug. 13 interview. Photographer: Krisztian Bocsi/Bloomberg

Wolfgang Schaeuble may hold on to his post as finance chief in German Chancellor Angela Merkel’s third-term cabinet even if the election in two days lands her with a new coalition partner.

Earning Merkel’s confidence through the upheavals of her second term puts Schaeuble in pole position when haggling for government posts ensues after Sept. 22. Polls suggest Merkel’s Free Democratic ally will struggle to remain in government let alone be in a position to demand plum jobs; the opposition Social Democrats’ finance expert and chancellor candidate, Peer Steinbrueck, refuses to serve under Merkel.

“The most likely scenario is that Schaeuble remains finance minister,” Oskar Niedermayer, a politics professor at Berlin’s Free University, said in a telephone interview. “If Schaeuble wants the post again, Merkel won’t deny it to him.”

Working from his ministry on Berlin’s Wilhelmstrasse -- the former Nazi-era Air Ministry and post-World War II Soviet military administration headquarters -- Schaeuble has been at the center of crisis-fighting since the beginning of Merkel’s second term in 2009: from combating the deepest recession in living memory to the euro region’s financial emergency.

Merkel’s most senior minister, his portfolio eclipses all other government departments save the Chancellery itself, making the Finance Ministry the prize in coalition deliberations. It is one that Schaeuble has claimed as his own within the ranks of his Christian Democratic Union party.

‘Keep Him’

“Wolfgang Schaeuble is an excellent finance minister,” Ralph Brinkhaus, a CDU member of the lower house Finance Committee, said in an interview. “We all very much want to keep him in the post.”

A wheelchair user who turned 71 on Sept. 18, Schaeuble has been partially paralyzed since being shot by a deranged assailant at a campaign rally in 1990. His health became an issue for Merkel in 2010, when he was forced to miss several crisis meetings after being repeatedly hospitalized.

While Merkel leapfrogged Schaeuble to the CDU party leadership during a funding scandal that brought down Helmut Kohl, she twice declined her minister’s offer to make way during his ill health in 2010. Merkel said that she’d given him the job because of his “wealth of experience” and because she trusted him, he told the Frankfurter Allgemeine Sonntagszeitung.

‘Hungry’ Schaeuble

Schaeuble now is “in good health and hungry” to remain in his post for another four years, Volker Kauder, the CDU parliamentary caucus leader, said in an Aug. 13 interview. The minister spoke at more than 30 campaign rallies, including four events in one day.

He hasn’t always been this popular in the CDU. He was forced out as party chairman in a bribery scandal a decade after leading talks that led to German reunification.

More recently, his austerity demands at the height of the euro crisis prompted Greek President Karolos Papoulias to remind him the country’s resistance against the Nazis.

While polls show Merkel is headed toward victory, voter surveys leave in doubt whether her governing partner will remain the Free Democrats -- her preferred option -- or switch back to the Social Democrats, with whom she was forced to form a coalition in her first term from 2005 to 2009.

Steinbrueck, her finance minister from those days, understands the importance of the post, having stood with Merkel to guarantee German bank deposits on Oct. 5, 2008, during the financial crisis. Yet he has said he won’t serve in another coalition comprising the two traditional rivals.

Diminished Influence

What’s more, in any grand coalition re-run the SPD would be in a weaker bargaining position than eight years ago. In 2005, Merkel defeated SPD Chancellor Gerhard Schroeder by just one percentage point, resulting in an equal distribution of cabinet posts. Now, the SPD led by Sigmar Gabriel, her then-environment minister, is polling 25 to 28 percent compared with 38 to 40 percent for her bloc.

It’s even questionable whether the SPD would seek the post, the government body that has to supervise adherence to Germany’s constitutional debt limit and control ministries’ spending, according to Niedermayer. Nobody in the SPD leadership wants finance at any cost, he said.

The SPD may prefer to claim the Foreign Ministry, now run by Free Democrat Guido Westerwelle, and the Labor Ministry, the department with the largest budget, where the Social Democrats could enforce the party’s “core issues,” Holger Schmieding, chief economist at Berenberg Bank in London, said by phone.

SPD Possibilities

A grand coalition with the Social Democrats might mean SPD Chairman Gabriel as vice chancellor, though he wouldn’t “bring anything to the table as finance minister,” said Juergen Falter, a professor of political science at Mainz university.

“I’m not sure that the SPD is even casting an eye on the post of finance minister,” Falter said in an interview.

Schmieding said two potential SPD finance ministers are European Central Bank Executive Board member Joerg Asmussen and Hamburg Mayor Olaf Scholz.

“If the SPD were to take over the Finance Ministry, Joerg Asmussen or Olaf Scholz would be two influential people who could head it,” Schmieding said. Asmussen “would be an ideal candidate because he embodies the grand coalition.”

Asmussen has worked at the Finance Ministry in various functions under CDU-led and SPD-led governments. Scholz, labor minister in Merkel’s first-term government, is a “pragmatic, no-nonsense politician who would probably be well received internationally,” Schmieding said.

Another factor is the Christian Social Union, the Bavarian sister party to Merkel’s CDU. After winning an absolute majority at state elections on Sept. 15, the CSU may have a stronger hand at the negotiating table.

Theo Waigel, serving under Kohl from 1989 to 1998, was the last CSU minister in that position. Among the possible CSU candidates to lead the ministry are Markus Soeder, the current finance minister in Bavaria.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE