ECONOMY

Schaeuble vies for supremacy as longest-serving German lawmaker

Wolfgang Schaeuble, who brokered German reunification in 1990, is negotiating what may be his own last act in a coalition government.

Schaeuble, the 71-year-old veteran of six German cabinets, is opposed by Social Democrats vying to take over the Finance Ministry he has led throughout the euro-area debt crisis. While Schaeuble has made it clear that he wants to stay, Chancellor Angela Merkel hasn’t tipped her hand on Cabinet posts in her planned coalition with the SPD.

As party leaders meet in Berlin on Wednesday, SPD chief Sigmar Gabriel is emerging as the biggest potential brake on Schaeuble’s ambitions. Gabriel, the probable vice chancellor, has yet to reveal to his party whether he has an interest in taking Schaeuble’s job, according to three SPD officials close to the negotiations who spoke on condition of anonymity because of the sensitivity of the deliberations.

That confusion ratchets up the stakes for Schaeuble as both sides approach a common platform for government by the end of the month. Failure to keep his job risks undermining the legacy of Merkel’s most experienced hand, who became her point man as the crisis spread from Greece. Staying on would allow him to help complete euro-area banking union and claim credit for eliminating Germany’s budget deficit.

“He has the ambition to enter the history books as the finance minister who consolidated the German budget,” said Gerhard Schick, the ranking member of parliament’s finance committee for the opposition Greens who jousted with Schaeuble during the crisis. “Schaeuble wants to help shape Europe.”

Paralyzed from the chest down and in a wheelchair since being shot by a deranged gunman in 1990, Schaeuble’s 41-year career in the lower house makes him the longest-serving lawmaker.

A lawyer by training, Schaeuble commands respect from his adversaries after forging his ministry into the most influential department after the chancellery since taking it over in 2009. He endured all-night meetings and vilification in southern Europe as he pushed Germany’s vision of tight budgets and competitive economies.

At the height of the debt crisis in May 2010, he was rushed to the hospital in Brussels after an adverse reaction to medication. From his bed, Schaeuble directed negotiations by phone, helping the EU craft an unprecedented $1 trillion loan package and bond purchases.

While Merkel’s Christian Democratic Union hasn’t floated other candidates for the finance post, backing for Schaeuble within the CDU may clash with Merkel’s need to make a cabinet deal with the Social Democrats to lock in her third-term government.

“Schaeuble doesn’t have carte-blanche,” Juergen Falter, a professor of politics at the University of Mainz, said in an interview. “For Merkel he’s a chess piece, even if he’s the most important after the queen.”

Schaeuble has seized back responsibility for euro policy making from a working group set up by the SPD, an indication that he is winning the battle to retain his post, according to one of the SPD officials and an official from Merkel’s party.

A victory lap for Schaeuble, who led negotiations to craft a united Germany following the collapse of the Berlin Wall in 1989, would cap a steady ascent in Germany politics to within striking distance of highest office.

“I enjoy politics and right now I’m healthy again, which hasn’t always been the case,” Schaeuble said in an interview with ARD television on Oct 22. “That’s why I believe I can carry out my task well in the next few years.”

Born in the southwestern part of Germany bordering France in 1942, less than a year after the U.S. entry into World War II, Schaeuble is 12 years older than Merkel. Both are proteges of former Chancellor Helmut Kohl, though their fortunes diverged after the Berlin Wall fell in 1989 and opened the door to Merkel’s eventual ascent.

Kohl anointed him as his likely successor in 1992, then went on to govern for another six years and contest two more elections.

Schaeuble was turned out of his post as CDU chairman and opposition leader by Merkel 10 years later after he became embroiled in a scandal involving secret party accounts, which led Merkel to break publicly with her mentor.

In 2004, Schaeuble was considered a contender to become German president, a mainly ceremonial post. He was thwarted by Merkel, then the opposition leader, who successfully rallied support for former International Monetary head Horst Koehler as her candidate.

Once she became chancellor in 2005, Merkel returned to Schaeuble, making him interior minister while handing the finance post to Social Democrat Peer Steinbrueck. Her re- election in 2009 lifted Schaeuble to the Finance Ministry.

She chose Schaeuble, who once worked as a tax administration official in his home state of Baden-Wuerttemberg, for his “breadth of experience” and to ensure “sensible budget policy,” Merkel said at the time.

This time, control of the Finance Ministry has been a dominant topic in coalition talks following Merkel’s best election victory since German reunification on Sept. 22.

Speculation has centered on Gabriel, the SPD chairman, seeking the Finance Ministry as the best way to influence Germany’s budget and domestic spending. All parties have said cabinet posts won’t be divvied up until the end of coalition talks, tentatively scheduled to wrap up at the end of November.

One option may be for Gabriel to surrender the SPD’s claim to the ministry as a way of extracting additional concessions from the chancellor. That would give Gabriel more leverage with Merkel, perhaps to assume a role in charge of a more-powerful Economy Ministry granted extra powers over energy policy.

In that scenario, Schaeuble would remain finance minister, a role that’s earned him support from German voters for defending the nation’s coffers and forcing austerity on indebted euro nations before doling out German aid.

“Schaeuble is popular as finance minister,” something “which very few politicians in Germany have managed to accomplish,” Falter said.

Schaeuble’s allies are urging him to stay put.

“Why should we dispense with his experience and his contribution just as we have important decisions on the European level?” Michael Meister, the parliamentary finance spokesman for Merkel’s Christian Democratic bloc, said in an e-mail.

[Bloomberg]