Chancellor Olaf Scholz has problems with stacking. Combined with the crisis from the war in Ukraine, which has forced the government to take measures to confront a winter of less Russian gas and rising inflation, and the throes of the pandemic, there are disagreements in the governing coalition, unfavorable polls and now a banking scandal , which has been going on for years and points to the Social Democratic top candidate. This Friday, Scholz had to appear for the second time before a parliamentary investigative committee of the Hamburg Parliament, which is intended to clarify, among other things, whether the chairman intervened and when in favor of a bank affected by the so-called cum-ex financial scandal. Between 2011 and 2018 he was mayor of the city-state.
Scholz, who testified before the Commission last spring, reiterated this Friday that he had neither exerted any political influence nor urged the Hamburg tax authorities to refrain from paying 47 million euros in taxes in 2016 . to Bank Warburg, one of those involved in the case. “I had no influence on the tax procedure at Warburg Bank and there was no political influence either, and I’ll say that again very clearly,” said the SPD leader. The Chancellor repeated what he had recently asked in Berlin on the subject: “This matter has been in the press for two and a half years. Countless files were studied, countless people heard. The result is always the same: there was no political interference.”
Returning to the scene of this tax fraud case is not only a headache for the chancellor. In the almost eight months at the helm of the federal government, which have been marked by the Russian invasion of Ukraine since February, the chancellor and his party, the SPD, have suffered a painful decline in the polls. According to a survey from mid-July, the Social Democrats have even dropped to third place behind the Christian Democrats of the CDU and the Greens – their government partner together with the Liberals of the FDP. In addition, another survey by Civey for Der Spiegel magazine last April revealed that 65 percent of Germans do not see Scholz as a strong leader.
Scholz was also branded a “boring” head of state, while his economics minister, the Green Robert Habeck, who is considered the most popular politician, was dubbed “the man who explains the world to Germans” by the Süddeutsche Zeitung. The Foreign Minister, the environmentalist Annalena Baerbock, and the Minister of Agriculture, the Green Cem Özdemir, take second and third place in the club of the country’s most popular politicians.
Irregular arms deliveries to Ukraine
The chancellor, too, lost points in public opinion with her erratic attitude towards arms deliveries to Ukraine and allowed her finance minister, the liberal Christian Lindner, to catch up in the energy crisis debate with the partner with the least weight in the coalition, which insists wanting to mark the government’s economic strategy and working towards extending the life of the three nuclear power plants whose shutdown date is set for the end of the year. The Greens, historically opposed to nuclear energy, are also getting involved in this dispute. And this two-sided game leaves the figure of the social democratic leader very blurred.
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“The red-green coalition partners are increasingly upset that Lindner rarely misses the opportunity to take the initiative and that the Chancellor tolerates all of this,” said Der Spiegel, referring to the problems that are poisoning the work of the governing coalition.
There have also been negative headlines internationally, most recently this week when the foreign minister failed to respond to statements in his presence by Palestinian Authority chief Mahmoud Abbas who claimed Israel had committed “holocausts” against Palestinians. . Scholz’s spokesman abruptly ended the press conference after this comment, without his boss responding. Scholz dismissed Abbas’ words as criticism mounted from all quarters inside and outside Germany.
The system, called Cum-Ex, was a tax optimization tool developed by several banks that allowed foreign investors to relieve their taxes on dividends. In this case, dozens of people have been charged in Germany, including bankers, stockbrokers, lawyers and financial advisers. A dozen countries are affected by the scandal.
Among the banks accused was Bankhaus Warburg in Hamburg, which should have paid 47 million illegal taxes. Scholz rejected the central suspicion of the investigative commission that the Hamburg facility had been spared political intervention. “There was no such influence,” he said, adding, “There was nothing.” “The allegations are based on assumptions and these are false and unsupported by anything or anyone,” he added. The chancellor has previously admitted to meeting with entity officials but claims he has no “concrete recollection” of the talks.
On November 9, 2016, the then Mayor of Hamburg, Scholz, called the bank’s CEO Christian Olearius and advised him to send all documents related to tax payments to State Finance Minister Peter Tschentscher, now Hamburg’s Mayor. On November 17, the tax authorities decided not to collect taxes from the bank and therefore partially forfeited the tax claims of the cum-ex network transactions. “There was no preferential treatment with Olearius,” he insisted.
The investigations into the cum-ex scandal in Germany and the chancellor’s alleged involvement serve as ammunition for the opposition to attack the chancellor’s credibility. This Friday, shortly before Scholz’s appearance in Hamburg, Friedrich Merz, the chairman of the conservative CDU, used the pages of the Handelsblatt to bring charges against the social democratic head of government. “Unfortunately, I have to say it very clearly: I don’t believe a word the chancellor says,” said the CDU leader. “It’s just incredible that Scholz doesn’t want to remember such a serious event in his own city. Certainly nobody in Germany believes in Olaf Scholz’s numerous memory gaps,” emphasized the CDU leader.
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