CHANCELLOR ANGELA Merkel is set to give Wolfgang Schäuble the key role of finance minister in her new government, a decade after ousting him as leader of Germany’s Christian Democratic Union (CDU).
The surprise promotion of Mr Schäuble, seen as a political heavyweight in her CDU camp, is an indication of serious cuts ahead to lift Germany from its worst economic slump in postwar history.
The new government will sign on Monday a coalition agreement that will include radical restructuring of the healthcare system and substantial tax breaks. None of the cabinet appointments, to be announced this morning, will set as many tongues wagging as yesterday’s reports about Mr Schäuble’s political promotion.
The 67-year-old has been a key player in the CDU since 1984. He took over the party leadership after Helmut Kohl’s 1998 election defeat only to find himself dragged into a political donations scandal involving the ex-leader a year later.
Deputy leader Ms Merkel saw the chance to kill two birds with one stone, penned a newspaper opinion article distancing herself from her political patrons, and took over the party leadership.
After years in the political wilderness, Mr Schäuble had a reconciliation of sorts with Ms Merkel when she brought him into the last grand coalition government as interior minister.
The two enjoy a polite professional relationship but have no personal contact: before the election, Mr Schäuble admitted to journalists he was completely in the dark about Ms Merkel’s plans for him.
Wheelchair-bound after being shot by a mentally ill man in 1990, Mr Schäuble’s admirers describe him as a cabinet “wonder weapon” with a professional background in finance and law.
But the father of four has no shortage of detractors, too: as a tough, law-and-order interior minister he attracted the ire of civil rights activists in the last government. They viewed as draconian his anti-terrorism and data retention laws and plastered Mr Schäuble’s face on posters above the slogan “Stasi 2.0”.
Mr Schäuble is married to an accountant, is the son of a tax adviser and worked in a state tax office before entering politics.
He will need to summon up all his training when he moves into the hulking, Nazi-era finance ministry on Berlin’s Wilhelmstrasse.
As well as a projected deficit of over €100 billion next year, Mr Schäuble may have to bend Germany’s own budget rules by shifting at least €50 billion in additional debts off the balance sheet.
Expected to take a dim view of excessive spending by cabinet colleagues, he shares Dr Merkel’s doubts about large-scale debt- financed tax cuts.
The two politicians worked together closely in coalition negotiations to water down the demand for €35 billion in tax breaks from their new junior partner. The Free Democrats (FDP) claimed victory in that battle yesterday, promising tax cuts of at least €20 billion and a tax reform by 2012.
After tough negotiations, the FDP has reportedly won a concession from the CDU to finance the health system from 2011 through a flat fee system, independent of salary. Currently, the health system is financed by a percentage of salary in a co-payment by employer and employee.
Opposition parties have attacked the plan’s provision to freeze employer contributions, which critics say will shift rising healthcare costs onto employees.
In other cabinet appointments, FDP leader Guido Westerwelle is expected to be named foreign minister today while the defence ministry is expected to go to Karl-Theodor zu Guttenberg, the 37-year-old rising star of Bavaria’s Christian Social Union (CSU).