Wolfgang Schäuble
Hawkish German finance minister who helped to steer the eurozone through the debt crisis
WOLFGANG SCHÄUBLE, who has died aged 81, was once described in this newspaper as the “big bad wolf of the eurozone”, but as the ultrahawkish German finance minister under Angela Merkel he earned huge respect, and made a few enemies, by helping to steer the currency union through the debt crisis that followed the global financial crash of 2008.
Earlier, as interior minister of the German Federal Republic under Chancellor Helmut Kohl, Schäuble played a key role in the negotiations that led to reunification with the communist German Democratic Republic after the fall of the Berlin Wall.
The second of three sons, Wolfgang Schäuble was born on September 18 1942, in Freiburg im Breisgau, in the south-west region of Baden Württemberg, into a staunchly Lutheran family. His father Karl, a tax adviser, served post-war as a member of the regional parliament.
Wolfgang attended schools in Triberg and Hausach, then read law and economics at Freiburg and Hamburg universities before completing a doctorate on accounting standards. He began work as a tax official but politics was his real passion.
An active member of the Christian Democratic Union (CDU) youth movement in his teens, in 1972, aged 30, he was elected to the Bundestag, representing the constituency of Offenburg. He went on to win the seat 14 times in a row and was still a sitting member when he died – making him the longest-serving parliamentarian in German history.
Schäuble’s career took off in the 1980s when Kohl appointed him CDU chief whip, then, in 1984, head of the chancellery (chief of staff ) and minister for special affairs. In April 1989, having established himself as Kohl’s right-hand man, he was promoted to minister of the interior. Later that year Kohl put him in charge of the negotiations for reunification. He signed the Unification Treaty in August 1990, recalling the moment as “the high point of my political life”.
By the time Germany was reunited on October 3 1990, Schäuble was being tipped as a future chancellor, but nine days later, at a campaign meeting in his constituency, he was shot by a gunman with a history of mental illness and was left paralysed from the waist down.
Although Schäuble was confined to a wheelchair from then on, he was back at work within weeks. He was subsequently instrumental in persuading the Bundestag to make Berlin Germany’s new capital.
Schäuble was a long-time supporter of greater European unity, but recognised the institutional challenges the EU would face as it moved towards a single currency. In 1994 he unnerved several European governments, including John Major’s, with a proposal for a two-speed Europe, featuring a eurozone core, led by Germany and France (with the Benelux countries), proceeding to a deeper union with tighter economic governance, and an outer core, including Britain, who might catch up in due course.
After the Christian Democrats lost the 1998 general election to Gerhard Schröder’s Social Democrats, Schäuble succeeded Kohl as head of the CDU and leader of the opposition and was expected to run for chancellor in 2002.
But his bid was foiled by Angela Merkel when he became embroiled in a scandal concerning improper donations to the party, and was forced to admit that he had received an unlawful donation of 100,000 marks in cash from a convicted arms dealer. He resigned as party and parliamentary leader, and was replaced by Merkel.
Yet when Angela Merkel eventually became chancellor in 2005, she returned Schäuble to the interior ministry and he continued to serve her loyally there and, from 2009, as finance minister.
In Germany, Schäuble took pride in moving to a budget surplus, which he achieved in 2014, but was criticised for prioritising balancing the books and welfare spending over much-needed investment, which left Europe’s largest economy lagging behind neighbours in such areas as digitisation, transportation, education and defence.
He had taken the finance portfolio as the sovereign debt crisis, beginning in Greece and soon spreading to Portugal, Ireland, Italy and Spain, threatened the survival of the single currency and, some argued, the EU itself. Schäuble’s answer was to apply the same medicine to the rest of the eurozone as he was applying in Germany, and from the outset he pressed for tougher rules to keep government deficits under control.
Germany initially held out against bailing out Greece and other indebted countries and when the rescue effort was eventually cobbled together, insisted on tough conditions including stringent budget cuts and structural reforms, making Schäuble a hate figure for many on the Left.
This was particularly true in Athens, where posters likened him to Adolf Hitler. His suggestion that Greece should take a 10-year “holiday” from the eurozone to realign its economy went down badly and was in any case vetoed by Angela Merkel. But the austerity measures he advocated had lasting effects. By 2023 Greece had become one of Europe’s fastest-growing economies.
Schäuble was always aware that monetary union implied fiscal integration, a properly functioning banking union, and a centralised treasury function. But his proposals for a European Monetary Fund with “comparable powers of intervention” to the IMF exposed the reality that there was no political consensus for such developments. When, in a speech in 2012, he called for a decisive move towards EU political union with a directly elected president in Brussels and greater common economic and financial policy, his appeal fell on deaf ears.
When Joachim Gauck, the centre-left German president, retired in 2017, Schäuble was tipped for the job but Angela Merkel gave it to Frank-walter Steinmeier, the SPD foreign minister. As compensation Schäuble was appointed speaker of the Bundestag, a role in which he served until 2021.
Throughout his career Schäuble was pro-american. He was one of few senior German politicians to support the Iraq war and was much more hawkish than others towards Russia, likening its seizure of Crimea in 2014 to Hitler’s annexation of the Sudetenland.
He took a hard-line approach to terrorism, calling for laws to empower German security forces to shoot down hijacked planes and assassinate foreign terrorist suspects. On immigration he was softer, saying that Muslim migrants were integral to German society and that he was more concerned about Germany becoming “inbred” than Islamicised.
He married, in 1969, Ingeborg Hensle, who survives him with three daughters and a son.
Wolfgang Schäuble, born September 18 1942, died December 26 2023