FRANKFURT, March 20 — Germany’s appointment of a Goldman Sachs executive to a senior finance ministry post yesterday drew accusations the government was once again cosying up to the banking sector that caused the 2008 economic crash.
Joerg Kukies, formerly the co-head of Goldman Sachs in Germany, was named deputy finance minister with responsibility for financial market policy and European issues, the ministry said.
It is the first time a German government has hired a Goldman Sachs banker and signals a recovery of the sector’s influence after the crash when it was shunned by politicians including Chancellor Angela Merkel.
Prior to that, Germany had a long tradition of using bankers to help steer the economy. In the 1950s, Chancellor Konrad Adenauer sent Deutsche Bank chief Hermann Josef Abs, rather than his finance minister, to negotiations over pre-war debt. Decades later, Helmut Kohl was advised by another Deutsche CEO, Alfred Herrhausen, on third-world debt and industrial policy.
But Goldman Sachs is viewed by many Germans as a symbol of a more cut-throat Anglo-Saxon capitalism, especially since a former executive in the country said banks had “no obligation to promote the welfare of the public”.
Lawmakers sceptical of Kukies’ appointment, under Social Democrat (SPD) Finance Minister Olaf Scholz, fear the appointment could anger voters who have turned away from mainstream parties in favour of the nationalist Alternative for Germany (AfD).
“Such revolving door cases multiply distrust of citizens towards politics,” said Sven Giegold, a Greens member of the European Parliament.
Timo Lange of Lobby Control, which campaigns for transparency in lobbying, said the appointment “strengthens the impression that politicians and the elite are working hand in hand and that there is little left for the ordinary person.”
The elevation of a Goldman Sachs executive comes as rival Deutsche Bank is struggling to rebuild its influence years after it was at the heart of German industrial and economic policy as part of a network of politicians and bankers known as “Deutschland AG”.
Much of that network unravelled during the 1990s and early 2000s as Deutsche Bank sold down its various stakes.
Former chancellor Helmut Schmidt said in 2011: “Deutsche Bank is no longer German”.
Kukies joined Goldman Sachs in 2001, working in Frankfurt and London, often profiting from deals which resulted from the dismantling of Deutschland AG. He worked in fixed income, equities and structured products, and in his new post will be responsible for financial market policy.
Fabio De Masi, a lawmaker with the leftist Linke party, said: “Olaf Scholz is imitating Donald Trump by putting the arsonist in the fire brigade.”
Kukies’ appointment coincides with a gathering momentum in Frankfurt where Goldman Sachs will be expanding its presence as Britain prepares to leave the European Union. — Reuters