The man at the heart of the European economic storm
German finance minister Wolfgang Schäuble’s term has been defined by the euro zone crisis, and by his uneasy political alliance with German chancellor Angela Merkel, but he is firmly optimistic that Germany – and Europe – will work their way out of crisis
THE VIEW FROM Wolfgang Schäuble’s office in Berlin is a window on history. The grey, hulking finance ministry was built as Hermann Göring’s aviation ministry. From Schäuble’s window, you can see a silver museum on the site of the former Gestapo headquarters, documenting the terror of the Nazi secret police.
In front runs a crumbling remainder of the Berlin Wall, on which is painted “Save our Planet”.
There have been moments in recent years when that appeal could have doubled as a job description for the German finance minister who next month turns 70.
After a life of remarkable highs and devastating lows in politics, his term as finance minister has been defined by the euro zone crisis: a punishing obstacle course of summits and statements, acronyms and arithmetic – all with the aim of rescuing the common European currency and, with it, the world economy.
If Schäuble is feeling the pressure, he isn’t showing it. Instead, he appears tanned and rested after his annual summer holiday on the North Sea island of Sylt.
In his airy office, amid sage-green walls and dark wood floors, he reads the Financial Times at his desk, the silence broken only by the discreet ping of incoming emails.
Perhaps the most defining characteristic about Wolfgang Schäuble in the seemingly endless euro zone crisis is his refusal to join the chorus of crisis Cassandras indulging in what one Brussels official dubbed the “intellectual glamour of pessimism”.
When alarm bells were sounding over Greece or Ireland, Schäuble declined to panic; when the bailout costs ballooned for Germany, he stayed out of the blame game – and won widespread respect among his European colleagues.
“One shouldn’t overrate the crisis,” he says. “People are taking note of the crisis, but they know it’s not the end of the world.”
Schäuble is one half of an odd political match – chancellor Angela Merkel shafted him to take his job as leader of the Christian Democrat CDU party – yet has proven a capable partner in the euro zone crisis.
In public, Schäuble stresses his loyalty to the German leader, though he always makes the point that their good professional relationship is no friendship.
“If the Chancellor and finance minister are not of the same view, the finance minister cannot exercise his role and the chancellor should seek out another,” he says.
As a member of the Bonn generation, Schäuble is an old-school European who finds himself defending both Germany’s European and national interests at the moment in history when they appear to be drifting apart – at least in the eyes of critics, both domestic and foreign.
At home, those opposed to Berlin’s crisis strategy – even within the ruling coalition – say Schäuble and Merkel, by agreeing to permanent bailout funds, have signed Germany up to a lifetime of penury just as it emerges as an economic powerhouse.
Around Europe, meanwhile, critics say Merkel, under Schäuble’s tutelage, has discarded Germany’s post-war European vocation just when the continent needed it most.
The reality appears to be somewhere in between: just as other countries are adapting themselves to a straitened economic future, Germany is redefining itself on the fly to a leadership role that has been thrust upon it, for which many here feel uncomfortably ill-prepared – politically, economically and emotionally.
LIFE IN POLITICS
It is within this narrow corridor of expectation and accusation – at national, European and global level – where Schäuble operates quietly in the background. While Merkel attracts the flak on the front line, reviews for Schäuble from his political peers are almost uniformly positive.
A crucial difference lies in their political styles: while Merkel bases her euro zone strategy on an emotionless, cold-eyed analysis of Europe’s future – unite or die in a globalised world – Schäuble makes the same argument with a passionate eye on the past.
Receiving Aachen’s prestigious Charlemagne prize in May, Schäuble’s acceptance speech framed the euro zone crisis in a sweep of European history from Charlemagne – who first united Europe in the 8th century – to Poland’s Solidarity movement which lit the spark to end Europe’s Cold War divisions. With an eye on the ongoing crisis, he paraphrased Sicilian author Giuseppe Tomasi di Lampedusa: “If everything in Europe is to stay as it is, then much, if not everything, has to change.”
Listening to his rhetorical and historical tour de force, it was hard not to wonder how current perceptions of Germany, and its role in the current crisis, would be different if Germany’s chancellor was named Schäuble and not Merkel.
The Zelig of modern German political life was born in 1942 in Freiburg in Germany’s south-west, near the French border.
He got involved in politics as a teenager and, after studying to be a tax lawyer, entered the Bundestag in 1972. He rose through the ranks of the CDU and, as interior minister, led negotiations for German unification in 1990.
Two events shattered his life: in October 1990 a mentally ill man shot him at an election rally, paralysing him from the waist down. He battled back to public life in a wheelchair as heir presumptive to then CDU leader Helmut Kohl.
He eventually succeeded Kohl in 1998 after the governing CDU was defeated at the polls but subsequently became entangled in a scandal around illegal political donations.
Sensing her opportunity, Merkel, then CDU general secretary, publicly distanced herself from Kohl and Schäuble and won the party leadership in 2000.
Appointing her former boss to cabinet was a daring move by Merkel after her 2005 election win, but in doing so she secured his loyalty and, in the euro zone crisis, gained a finance minister with a wealth of European political experience.
RETURN TO CABINET
Schäuble declines suggestions that he is a “Merkel whisperer” or claims that today’s German finance minister has more influence in Europe than some German chancellors of the past.
“Germany has always had a particular role in Europe because of its geography, size and history – perhaps even more in the unusual situation of the euro crisis,” he says. “All the more reason to have close trust with the chancellor. It works very well.”
An interesting read is a 1994 paper Schäuble co-authored, warning that the European Union had reached a critical juncture. To avoid the EU degrading itself to a free trade zone, Schäuble proposed the creation of an EU core, open to all, to co-ordinate monetary, budgetary, economic and social policy.
In hindsight, it reads as a clear warning against the decoupling of European monetary union from political and economic union. Schäuble is sanguine about what’s happened since.
“As long as a society is prosperous, the willingness for change is, in general, low,” he says. “Crisis and pressure help foster change – that’s why I’m not so pessimistic towards crises.”
He sees the euro zone crisis as an opportunity to concentrate European minds and agree the kind of integration steps considered politically impossible even two years ago.
That hasn’t always found favour with Merkel: she shot down his idea of a European Monetary Fund back in the day when she favoured localised fire-fighting in Greece and Ireland. As the crisis has spread and deepened, however, Merkel’s strategy increasingly resembles that favoured by her finance minister.