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Global Players

Global Players

December 2010

Wolfgang Schauble, Finance Minister, Germany

Wolfgang Schauble

“Only a few people have ever accused me of lacking sufficient courage. But courage is no substitute for experience. And it’s my experience that everyone supports…”

— Wolfgang Schauble, 2010

First, he was hailed as the architect of Germany’s reunification. Now, Wolfgang Schäuble, Germany’s Finance Minister, is once again responsible for holding Germany together, this time after his country faced its worst financial crisis since the 1930s. For his efforts, the Financial Times has placed him at the top of its annual European Finance Minister Rankings for 2010.

This is particularly notable, considering that Schauble, though one of Germany’s veteran politicians is a relative newcomer as a financial head. Although he studied economics and law, his interest in politics led him to join the youth wing of the Christian Democratic Union (CDU) Party. In 1972, Schauble joined the Bundestag, which is the lower house of the German parliament. Being a keen footballer and skier, four years later Schauble was appointed head of the CDU Committee on Sport, and simultaneously practiced as a barrister at the Offenburg Regional Court.

When Chancellor Helmut Kohl came to power in the early 1980s, he appointed Schauble as the Minister for Special Tasks. Schauble handled various responsibilities until he assumed one of the most important roles of his life as Minister of the Interior in 1989. It was a time when Germany was on the brink of revolution and Schauble became a catalyst for change. He represented the Federal Republic of Germany and was at the forefront of ongoing efforts to unite East and West Germany. In fact, it was Schauble who signed the treaty that sealed Germany’s unification.

But shortly after he helped to orchestrate Germany’s political transformation, Schauble himself was about to face his greatest hurdle. In 1990, he was shot by a mentally unstable gunman, leaving him paralyzed from the waist down and wheelchair bound. Through sheer willpower and determination, Schauble returned to work in just six weeks while still undergoing rehabilitation and therapy. Understandably, Schauble had become quite a very popular local hero. Within a year, he assumed more challenging responsibilities as Kohl’s chief of staff and head of the CDU. But in the 2000 elections, Angela Merkel replaced him as CDU leader and Schauble dissolved into the background.

Five years later, Merkel herself chose Schauble to be her Federal Minister of the Interior. This time, Schauble, known for his tough law and order principles, enforced stringent security measures to fight terrorism and cybercrime.

He is a typical lawyer, who thinks of solutions in terms of the law. He is not a typical German politician, trying to be everyone’s darling.

— Gerd Langguth, a professor of politics and biographer of Angela Merkel

Schauble’s appointment as the Finance Minister in October 2009 came as somewhat of a surprise to party members. But Merkel’s intent was clear. By now the 68-year-old Schauble was the only current politician to have served in the cabinet before the fall of the Berlin Wall. Merkel wanted to draw on Schauble’s wellspring of political as well as economic experience to tackle the ripple effects of the recession.

In his first interview after his appointment, Schauble said that his prerogative was to boost Germany’s growth rather than curb its ballooning deficit. Yet unlike others, Schauble did not choose to increase spending to stimulate growth. Instead, Schauble mapped out strict fiscal measures to do quite the opposite – curb expenditure. In December 2009, a massive wave of tax cuts was introduced amounting to $11.1 billion.

This was a precursor to an extensive four-year package of budget cuts worth $107.3 billion, which was introduced in July 2010. Equivalent to roughly 2.7% of the GDP, the initiative mainly specified reductions in welfare and defense spending. “We’re setting out to scale back the excessive deficits and ensure our economic development is sustainable,” Schauble announced, adding that the cuts would also help in scaling back Germany’s deficit by nearly 40% in the next five years.

And Schauble’s measures have reaped results, with a 2.2% growth rate clocked in the third quarter. Encouraged, he is planning to introduce a tax on airline tickets as well as on nuclear fuel rods, which is expected to earn $3.02 billion for the government this year.

It appears that Schauble is leading his country by example. Each time his fragile health fails him, Schauble manages to return undaunted, seemingly stronger. And if this tough German has his way, his homeland will now follow suit.





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