Why the German Ministry of Finance has become a battleground | Germany | In-depth news and reporting from Berlin and beyond | DW

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Germany takes another step towards a new government. Official coalition talks have started between center-left Social Democrats (SPD), Green Environmentalists and Free Democratic Neoliberals (FDP). The parties have said the talks will last at least until the end of November and that the question of the distribution of portfolios and ministries will not be answered until the very end.

It is no surprise that the Greens and the FDP are vying for the key post of finance minister.

“This is the most influential role besides the chancellor,” said Uwe Jun, political scientist and party researcher based in Trier. This is because the finance minister submits the budget and “policymaking has a lot to do with financial resources,” he added.

Although parliament ultimately decides whether or not to adopt a budget, the preliminary planning is done in the finance ministry. At the ministry, a huge building on Wilhelmstrasse in Berlin with over 2,000 employees, they closely examine the financial needs of all government departments and budget with them.

The Ministry of Finance in the government district of Berlin is one of the tallest office buildings in the city

As such, the two finance ministers of the past 12 years, Wolfgang Schäuble of the conservative Christian Democrats (CDU) and Olaf Scholz (SPD) have wielded “considerable influence,” Jun told DW. Scholz is now likely to be Germany’s next chancellor.

Hans Eichel of the SPD was finance minister from 1999 to 2005. He told German radio Deutschlandfunk that he felt “strong” in this role, but added that for a government to be successful, collegial cooperation is more important. important as strong ministers.

Power of veto

The Minister of Finance can veto all other Cabinet ministers. However, this is a “blunt sword,” Eichel said. The veto can be overruled by simple majority, so if the finance minister does not get what he wants, he will not come out strengthened but weakened.

Political scientist Jun thinks it is better for a finance minister to build mutual trust and seek solutions together, rather than confront other ministers.

The Minister of Finance also weighs heavily on the international scene. Former Minister Eichel described the Ministry of Finance as “a true European ministry”.

“No group in Brussels has as much influence as ECOFIN, the EU’s Economic and Financial Affairs Council,” he said.

Jun agrees, pointing to former Finance Minister Schäuble, who has always insisted on respecting the EU’s Stability and Growth Pact, and Scholz, who used his influence in the decision-making of the EU. EU during the coronavirus crisis.

In addition, the Minister of Finance represents Germany in the Eurogroup, which heads the monetary union, and globally in the G20, a group of the world’s most powerful economies formed in 1999.

Government experience trumps financial expertise

The last five finance ministers had all held important positions prior to their appointment. Four of them were state prime ministers, and Schäuble had previously served as federal interior minister.

Eichel said it was not necessary for the minister himself to be a financial specialist because “the right experts are all in the ministry”. Rather, the minister’s role is to get them to make good decisions.

Neither Christian Lindner of the FDP nor Robert Habeck of the Greens have studied economics. Lindner has no ministerial experience, but Habeck ruled at the state level – he was deputy prime minister and headed the environment ministry in the northern state of Schleswig-Holstein for six years.

It is an advantage for a finance minister to understand the departmental coordination of the government “from within,” Jun said, because the finance ministry has to coordinate a lot. In Lindner’s case, his personal experience in the matter is “rather thin”, he added.

Jun also pointed out that the Greens, for example, were worried about whether they would be able to implement their climate protection goals with Lindner as finance minister. The priorities of the FDP are market-based instruments and incentives for technological solutions, while the Greens are more inclined to state regulation and direct government funding.

For the FDP, Jun said, this post is particularly important because financial and economic policy is at the heart of the party.

Fearing to lose face

Current Finance Minister Scholz has scored points in the coronavirus crisis and after the catastrophic summer flooding with pledges of help to businesses and those affected. Now he is in line to become Chancellor.

“Scholz took advantage of the fact that the federal budget situation was very good,” said Jun. “But it is also possible that the fiscal situation will deteriorate significantly and that a finance minister will have to make significant cuts.” If unpleasant decisions are made, Scholz’s reputation could decline.

But Jun doesn’t expect the coalition to fail because of the finance ministry dispute. The SPD, FDP and Greens all told the audience they wanted a coalition of fresh starts and spoke of confidence and a high level of will.

Jun said that if they failed in the job assignment now, “all parties involved will lose face.”

This article was translated from German

While you’re here: Every Tuesday, DW’s editors summarize what’s going on in German politics and society, with the aim of understanding this year’s elections and beyond. You can sign up for the weekly Berlin Briefing email newsletter here, to stay abreast of developments as Germany enters the post-Merkel era.


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