• Date 21 November 2024

Dr Kukies, you assumed office as the new Federal Minister of Finance on 7 November 2024. Could you briefly introduce yourself to our readers?

Yes, of course. A number of colleagues at the Federal Ministry of Finance know me from the period 2018 to 2021, when I held the office of State Secretary for European and Financial Market Policy.

That was a memorable time shaped, not least, by the wide range of challenges posed by the pandemic. Back then, I was directly involved in launching the coronavirus assistance programmes, the Economic Stabilisation Fund and EU support measures.

Following the 2021 general election, I moved to the Federal Chancellery along with Federal Chancellor Olaf Scholz. There, I held the post of State Secretary and headed the Directorate Generals for Economic, Financial and Climate Policy and for European Policy, and, as the German representative (Sherpa), negotiated the outcome documents of the G7 and G20 Summits. The Finance Ministry’s main policy areas were therefore a constant companion during this time, too.

I am an economist by training. I started out studying economics in my home city of Mainz and subsequently in Paris. Following this, I had the opportunity to continue my studies in the United States at Harvard University and then did my doctorate at the University of Chicago.

I then began working at the US investment bank Goldman Sachs. So dealing with investment products, institutional investors, pension funds, regional state banks, insurance companies and complex sets of figures has long been familiar territory for me, and I also have extensive experience from “the other side”.

At the same time, I am very engaged in politics. I was influenced by my upbringing in a social democratic family and was head of the Rhineland-Palatinate branch of the Jusos (Jungsozialisten in der SPD – Working Group of Young Socialists in the SPD) in the early 1990s.

I viewed switching to politics in 2018 as a great opportunity to draw on my experience from the financial sector when it comes to the implementation of much-needed reforms. We have already managed to get some of these reforms under way, such as making progress with the banking union. However, it is no secret that right now there are important initiatives – not just in Germany but also at the European level, such as the capital markets union – that need to be implemented without further delay.

Apart from that, I can reveal that I am a loyal supporter of 1. FSV Mainz 05 football club.

As things currently stand, the Bundestag will no longer adopt a federal budget for 2025 this year. What does this mean for the federal government next year?

If this does happen, which we have to assume will be the case, the Finance Ministry will soon issue a circular on the interim budget in view of these circumstances. This is neither unusual nor problematic from a technical perspective. Rather, interim budgets are based on a rule that is enshrined in the Basic Law (Grundgesetz) and that regularly takes effect after general elections, for example. This happens while a new government is being formed. We even had an interim budget for a short period during the current fiscal year, following the intensive consultations as a result of the Federal Constitutional Court’s decision on the Second Supplementary Budget Act 2021.

As a general principle, the federal government will make all necessary expenditures and fulfil all of its commitments. The Basic Law provides clear rules in this regard.

And, based on past experience, unreleased funds are usually disbursed quickly after an interim budget ends, meaning that no significant negative effects on growth for the year as a whole are likely to be expected.

In any case, the Federal Ministry of Finance will naturally prepare everything needed to enable a quick start by a newly elected federal government.

The German economy has been stagnating for a number of years. What measures do you consider necessary?

Our potential growth has in fact fallen from 1.5% in the early 2000s to 0.5% at present. We therefore need structural reforms. As part of the growth initiative, we agreed on a range of measures in the summer that aim to revive our economy. We can even enact some of these measures in the remainder of the current legislative term as they have already been approved by the federal cabinet and there is a shared agreement regarding their necessity. These include, in particular, adjusting the tax schedule to take account of bracket creep, promoting e-mobility, improving depreciation options for all companies and increasing child benefit. We should seize this opportunity. We are talking about sums in the billions that we can use to support companies and individuals in a targeted way and give our economy an urgently needed boost. The Federal Ministry of Finance can make a valuable contribution in this regard.

The new European Commission will take office soon. Which projects will the Federal Ministry of Finance prioritise at European Union (EU) level? What do you consider particularly important when it comes to Germany’s role in the EU?

I sincerely hope that we make progress in the area of reducing bureaucracy. The Commission President has made very extensive proposals concerning the reduction of reporting requirements – something we are very much in favour of. We now need to implement these proposals together. I have already consulted with France’s Finance Minister, Antoine Armand, and we have agreed on ways to support this process.

Another key topic is access to capital for German companies. We need to mobilise more capital, particularly equity capital for growth-stage companies. Growth prospects in Europe still remain considerably less favourable than in the United States, for example. This problem is partly associated with the fact that our capital market is fragmented and large savings held here are not being invested adequately in companies’ growth. For this reason, we continue to press for a deeper and true EU capital markets union at the European level and, in Germany, for a consistent reform of the second and third pillars of our pension system. Reinvigorating the securitisation market and improving investment propositions for Europeans are likewise crucial.

I would like to make one thing clear: in the face of the upcoming elections, Germany is most certainly capable of taking action and is, above all, prepared to assume a leading role in Europe.

2024 has been a “super election year”. Around half of the global population have been called upon to vote, with new majorities emerging in countries like the United States. How can Germany position itself on the global stage and what role can the Federal Ministry of Finance play?

The priorities of the federal government and the Federal Ministry of Finance are clear: political and fiscal stability in the near future, clear perspectives and investment that ensures growth and social cohesion. This is the only way to successfully boost confidence in our democracy and our country over the long term, given that Germany bears a large responsibility for Europe’s security especially in the current climate – and this includes fiscal policy.

I have recently returned from a G20 meeting in Rio de Janeiro. This demonstrated once again the particular importance of the G20 format for sharing information with other countries on a multilateral and bilateral basis. Despite the major geopolitical challenges and diverging views, continuous dialogue is vital.

I know from personal experience that the staff here at the Federal Ministry of Finance possess considerable expertise and are highly dedicated; I am therefore very confident about being able to make a meaningful contribution with this team. I am very pleased to be returning and view this change of office as an opportunity this time around, too.