- Date 7 June 2019
The Nikkei: What issues would you like to address at the G20 meeting in Fukuoka (Japan)?
Olaf Scholz: The Japanese presidency was very smart in identifying the issues that really matter right now. One major issue that we will be working on at the G20 meeting – and one that the Japanese presidency is very proactively engaged in – involves reaching an agreement on an international system to ensure a minimum level of taxation. This is a topic that is also being addressed by the G7 and the OECD. I hope that we make further progress on this matter in Fukuoka.
On the topic of Europe, are you opposed to the lead candidate ( Spitzenkandidat ) system for selecting the President of the European Commission?
Olaf Scholz: I am in favour of the lead candidate process. Frans Timmermans, who is the lead candidate for the social democratic and socialist parties in Europe, should be the next President of the European Commission.
Why not Manfred Weber? You’re the Vice-Chancellor of Germany. You could also go to bat for Mr Weber...
Olaf Scholz: National allegiances are no longer the determining factor in the European Union. Rather, the more decisive factor is the similarity of political views within related political parties.
So if the Commission President is not a German, then Jens Weidmann could theoretically be selected to head the ECB. Are you in favour of Jens Weidmann as the next ECB President?
Olaf Scholz: Again, you are looking at these decisions as matters of national allegiance, but our perspective must always be a European one. Germany in particular has a special responsibility, given its position as a large, populous, economically powerful country at the heart of Europe. We are called upon to work jointly with other countries to pave the way for progress and compromise in Europe. The decision about who will succeed Mario Draghi as head of the ECB will be made in this spirit as well. This discussion is already underway, and there are good people who are qualified for this office. The President of the Bundesbank is one of them.
There is criticism that Germany is too hesitant in pressing for further European integration. Do you think this isolates Germany a bit within the EU?
Olaf Scholz: Not at all. In my activities as Finance Minister, I have worked very proactively for more European integration. In the past year alone, we have implemented 13 legislative projects to advance integration processes in both the banking union and the economic and monetary union. This compares with just three legislative initiatives adopted in the entire three years before that. One of the key actions we took was to enhance the stability of the Single Resolution Mechanism. So as you can see, we are making progress.
What is the future of Europe?
Olaf Scholz: There will be further integration in Europe. That is quite clear. The Social Democratic party has called for more European integration since the early 20th century. We quite consciously consider ourselves to be pro-European. The European Union is a highly successful project that has led to durable and stable peace on the European continent.
Some experts are concerned that the European economy is about to cool down significantly. What is your view?
Olaf Scholz: The economy is growing, but it’s now growing at a somewhat slower pace than before. But all economic forecasts point to a renewed pick-up in economic momentum over the coming year, both in Germany and in the EU as a whole. Labour market conditions in Germany are good, and our employment rate is at a record high. A lot of German companies still can’t find enough skilled workers. One of the consequences of a slower growth rate is slower growth in tax revenue. But tax revenue continues to grow. In the end, it’s not something to get all worked up about.
Germany is always being criticised for having an excessive current account surplus. What is your take on this dispute?
Olaf Scholz: We have taken many decisions recently that aim to boost domestic demand. This includes tax relief for low and middle income earners. At the same time, we have raised public investment levels to a new record high.
Would the German government back off from a balanced budget if this were necessary?
Olaf Scholz: Our coalition government agreed that it wants to govern without taking on new debt. But if there were a genuine economic crisis, we would be capable of doing whatever is necessary. Germany’s options for tackling an economic crisis are pretty much unlimited. This works not only to Germany’s benefit but to the benefit of the entire European Union. There is no crisis right now. So it’s good that Germany’s debt-to-GDP ratio will fall below 60% this year.
You would like to introduce a basic pension ( Grundrente ) in Germany. Why is that?
Olaf Scholz: The vast majority of people in Germany are in favour of a basic pension. They think it’s right for women and men who have put in a long life of hard work to receive a decent pension. People who have worked all their lives and paid into the pension system must also be able to live on the pensions they receive.
After the merger between Deutsche Bank and Commerzbank didn’t pan out, would you want to see a foreign bank take over Commerzbank ?
Olaf Scholz: The talks between Deutsche Bank and Commerzbank were something that took place between two private companies. We watched the process closely. But what these companies decide to do is up to them.
As a politician, you stated clearly that you would like Germany to have a national banking champion...
Olaf Scholz: What I want is for Europe and Germany to have an efficient, high-performing banking sector. Germany has an open economy. Banks from all around the world have branches and subsidiaries in Germany. In the course of preparing for Brexit, countless banks have moved their business from London to Germany – especially to Frankfurt, because Frankfurt is an attractive place to do business. This is the case in particular for many Japanese banks. What’s important is to provide the conditions that enable more business – and good business – to be transacted in Germany and Europe. Come to our countries and intensify the competition there. And at the same time, we want our own banks to be strong and to be able to engage in business activity around the globe.
Thank you very much.
The interview was conducted by Shogo Akagawa (Nikkei) and published on 7 June 2019.