BERLIN, Sept 9 — German Finance Minister Olaf Scholz found himself in the hot seat today, having to explain his role in two huge financial scandals that have recently shaken the country.
The Social Democrat who hopes to succeed Angela Merkel as chancellor faced questions by lawmakers over his role in the oversight of scandal-hit Wirecard, which collapsed in June with a €1.9 billion (RM9.4 billion) hole in its balance sheet.
He also underwent a separate parliamentary grilling in connection with the so-called cum-ex tax fraud, after German media reports said Scholz had more extensive contacts with one of the banks involved — Hamburg-based private Warburg bank — than he previously admitted.
In a survey for the weekly Spiegel magazine, more than 80 per cent of respondents said Scholz should provide more details about his relationship with the bank and its former boss Christian Olearius.
The complicated share dividend fraud cost Germany as much as €5.5 billion, according to government figures.
The opposition Greens’ finance spokeswoman, Lisa Paus, said Scholz must make his correspondence with Warburg public.
Florian Toncar, an MP for the liberal FDP opposition party, said it was up to Scholz to clear up suspicions that the Warburg bank received “preferential treatment”.
But lawmaker Carsten Schneider, of Scholz’s centre-left SPD, said the political tough talk was part of electioneering ahead of Germany’s elections next year.
“They are trying to discredit the character of the finance minister… and in doing so they want to damage the SPD’s candidate for chancellor.”
The Frankfurter Allgemeine newspaper said Scholz’s prospects as chancellor have “darkened considerably”, while the Sueddeutsche Zeitung said he was carrying the scandals around like a millstone.
Safe pair of hands
When Scholz was nominated in August as the centre-left Social Democrats’ chancellor candidate next year, he was seen as a safe pair of hands.
A party veteran, competent, perhaps a little bland –- he was the party’s obvious answer to Angela Merkel of the conservative CDU party, who is bowing out after four terms.
Few German politicians have been in the limelight as much as former Hamburg mayor Scholz in recent years, and he has risen to become one of the country’s most popular politicians over his handling of the economic fallout of the coronavirus pandemic.
He has given his party a small boost in the polls, with the SPD now clipping the heels of the Greens, which leads the Social Democrats 18 per cent to 16 per cent, according to a recent poll in business daily Handelsblatt.
Merkel’s conservative coalition is well ahead on 35 per cent.
But his long political history has given his opponents much to pore over.
As finance minister, his portfolio includes the financial regulator BaFin, accused of botching its oversight of digital payments provider Wirecard.
Wirecard’s fraud scandal, which Scholz has described as “unparallelled”, shocked Germany and sparked questions over regulatory failings.
The Financial Times newspaper raised suspicions about Wirecard’s business activities in a series of articles in 2019, but these did not apparently prompt German authorities to look at Wirecard more closely.
German prosecutors instead opened investigations into the FT journalists themselves, fuelling criticism that regulators failed to act on early warning signs.
Last week, Scholz said Wirecard’s demise has created a “window for reform” of the sector.
Supervisory authorities should be equipped with “more stringent instruments” to oversee companies, he added. — AFP
