Most analysts see no change from Lindner
The new German coalition and the advent of new leadership at the German Ministry of Finance and the Bundesbank have created a new landscape not only in the European Union’s biggest country but also in the entire eurozone, with Greece potentially seeing a significant impact.
The question for Greece is whether a hardline front will be created within the Eurogroup and the European Central Bank, in line with what new minister Christian Lindner has professed to date.
Dennis Shen, economist and director at Scope Ratings, tells Kathimerini, “A Lindner Finance Ministry makes a return to EU fiscal rules with fewer changes more plausible – which could result in the normalization of some constraints on indebted borrowers such as Greece to consolidate budgets and ensure sustainable debt trajectories.”
Other analysts see no change coming with Lindner at the helm of the German Finance Ministry. “I do not expect a harder German line. It was easy for Lindner to sound tough while in opposition. Now in government, he’ll have to be flexible. On key questions, [Olaf] Scholz as chancellor will count,” says Berenberg Bank Chief Economist Holger Schmieding.
“In the end, Scholz will steer Lindner,” is also the view of Carsten Brzeski, global head of Macro for ING Research, adding that the agreement by the new German government coalition members “should take away some of Lindner’s fear factor for the rest of the eurozone.”
Daniel Gros from the Center for European Policy Studies (CEPS) agrees: “Lindner’s past opinions do not deserve a lot of attention today as he will be bound by the coalition agreement and big policy issues will be decided at the level of the European Council, by the chancellor. The coalition agreement says the Stability and Growth Pact should not be changed but is open to special treatment on green investment. I therefore expect little change in the fiscal rules,” he tells Kathimerini.
“The fact that Lindner has to balance the opposing views within the coalition, while he already acknowledges that Germany cannot behave like any other [small] country, means that German fiscal policy views will not change all that much compared to the ones held by Scholz,” Oliver Rakau, lead German economist at Oxford Economics, adds to Kathimerini.