The battle for Germany’s finance ministry begins

Although the SPD has designs on the ministry, Merkel’s CDU is determined Shäuble will stay put

International Monetary Fund managing director Christine Lagarde listens to Germany’s finance minister Wolfgang Schauble  in Washington, DC. Photograph: Yuri Gripas/IMF.

International Monetary Fund managing director Christine Lagarde listens to Germany’s finance minister Wolfgang Schauble in Washington, DC. Photograph: Yuri Gripas/IMF.

 

A month after Germany’s federal election, the real battle begins: for the finance ministry on Berlin’s Wilhelmstrasse.

The hulking structure of heavy grey stone walls, endless corridors and a reported 2,000 rooms was built originally for Hermann Göring’s air ministry. Home to the federal finance ministry since 1999, it is from here that Berlin has shaped euro zone policy and extended its influence across the continent in the euro crisis.

And so, even before next week’s expected start of formal talks for a grand coalition, voices in the Social Democratic Party (SPD) are calling on the party to take the ministry from Angela Merkel’s Christian Democrats (CDU). Confident that they are Merkel’s only real coalition option, unnamed SPD figures told Die Welt daily yesterday that only with control of the finance ministry – as they had in the last grand coalition – can they make their mark in office.

Given the ministry’s influence – and its right of veto against the chancellor – the CDU is determined that finance minister Wolfgang Schäuble should stay put. SPD designs on the ministry are out of touch with the new political reality, CDU strategists argue.

Last month the CDU scored its best election result in more than 20 years, they point out, just five seats short of an absolute Bundestag majority. The SPD scored its second-worst result in its 150-year history.

Merkel is said to be anxious to retain her finance minister, at 71 the most senior figure in German politics, to ensure continuity at EU level and prevent a return of the euro crisis.


Unpredictable partner
One worry is that the SPD, to boost its domestic profile and political support, could prove a heavy hand or unpredictable partner on euro finance matters. Last week SPD budget spokesman Carsten Schneider restated his party’s preconditions for allowing ESM recapitalisation of Irish banks and precautionary funding: respectively a higher Irish corporate tax rate and participation in a financial transaction tax.

Dublin has ruled out movement on either front.

On Monday, SPD general secretary Andrea Nahles confirmed that the party leadership backed this position.

However, other senior SPD figures send mixed signals over whether they intend to raise Ireland in coalition negotiations with the CDU, or once in office.

The eventual strategy could hinge on the figures most often named as possible SPD finance ministers: Sigmar Gabriel and Bundestag floor leader Frank-Walter Steinmeier.

Though both are political heavyweights, Gabriel is said to be closer to the recapitalisation-critical position of Schneider. Should the SPD press for finance, Gabriel will have first refusal on the job. He dismissed the speculation via Facebook yesterday, saying there had been no discussion of cabinet positions – neither at exploratory talks with the CDU nor at internal SPD meetings.


Cabinet speculation
CDU officials hurried to agree. Despite this, there is widespread speculation that – of 14 cabinet positions – the CDU will lay claim to five, the SPD six and three for the CSU, Merkel’s Bavarian allies. An extra minister position may be created within the chancellery, a “minister for special tasks”.

Gabriel has reportedly not decided if he wants to push for the finance ministry, or even take the job himself. A former environment minister, he might yet be convinced to take a beefed-up economics ministry, with new competence for Germany’s transition from nuclear to renewable energy.

And how long will the coalition negotiations take? Merkel told a CDU phone conference she was bracing herself for the long haul. “Christmas,” she quipped, “comes quicker than you think.”