Schaeuble, German Minister and Fiscal Guardian, Dies at 81

Michael Nienaber and Patrick Donahue
·6 min read
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(Bloomberg) -- Wolfgang Schaeuble, who helped forge German reunification before being toppled from party leadership in 2000 by Angela Merkel, only to re-emerge almost a decade later as her fiscally hawkish finance minister to steer Europe’s largest economy through the euro crisis, has died. He was 81.

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Paralyzed from the chest down and confined to a wheelchair since a gunman shot him at a political rally in 1990, Schaeuble died late Tuesday.

“His intellect, his joy in democratic debate, his conservative world view and his rhetorical sharpness particularly distinguished him,” Chancellor Olaf Scholz, a Social Democrat who succeeded Schaeuble as finance minister in 2018, said in a statement.

Schaeuble’s ascent in the Christian Democratic Union traced the party’s stewardship over German reunification after the collapse of the Berlin Wall as well as its descent into scandal in the late 1990s because of party-financing irregularities.

By the time he was appointed by Merkel to oversee Germany’s federal finances in 2009, he came to be seen as one of the few policymakers with enough heft to guide Germany out of Europe’s worst financial crisis since World War II.

During that tenure, Schaeuble embraced his role as the guardian of German fiscal discipline, a policy anchored in constitutional borrowing limits. Reviled by critics of austerity, the statesman was celebrated in his party as the ultimate protector of the so-called “black zero,” or balanced budgets.

Identified by a pronounced accent that marked his origins in the Black Forest region of southwest Germany, Schaeuble built a political career over 50 years that brought him within striking distance of the country’s highest offices. Having been elected to the Bundestag, Germany’s lower house, in 1972, he was the chamber’s longest-serving lawmaker at his death.

In 2017, his party put him forward as Bundestag president, this time as a safeguard of democracy after members of the far-right Alternative for Germany party entered the chamber. He held the post until 2021, when the Social Democrats won that year’s election, and became a backbencher.

Former Chancellor Helmut Kohl anointed Schaeuble his likely successor in 1992, but then went on to govern for another six years and contest two more elections. Never having attained the chancellorship, Schaeuble was a favorite in 2004 to become the country’s federal president. He was thwarted again by then-CDU leader Merkel, who chose Horst Koehler as her candidate instead.

CDU Grandee

Schaeuble honed a presence that reflected his austere Protestant upbringing in Freiburg, echoing moral piety in a political system that prized secularism. During the global financial crisis of 2008 and 2009, he criticized company executives for earning inflated salaries as the financial system verged on collapse.

“It wouldn’t be bad if this crisis led to a correction of excesses,” Schaeuble said in Stern magazine in November 2008. He cited “self-serving attitudes — a clique of managers endorses three-digit-million checks in a closed system that nobody can leave once he’s inside it.”

Schaeuble was not always loved. He served two separate stints as interior minister — and his unwavering stance on public security was assailed by civil-liberties and privacy advocates who blasted plans to search computers, monitor online activity and deploy the military for domestic security. In 2006, posters appeared in Berlin of the minister with the words “Stasi 2.0,” a reference to East Germany’s omnipresent secret service.

Merkel, who won the 2009 election with her favored partner, the pro-business Free Democratic Party, needed to fend off the FDP’s calls for steep tax cuts even as debt mounted. She found a CDU grandee with enough weight to guard the coffers.

During a European Union crisis meeting in May 2010, the minister was rushed to the hospital in Brussels after reacting to medication. From his bed, he directed negotiations by phone, helping the EU craft an unprecedented $1 trillion loan package and bond purchases.

Schaeuble later told Frankfurter Allgemeine Sonntagszeitung that Merkel refused twice in 2010 to accept his offers to resign as finance minister because of his ongoing health problems.

Schaeuble had proved his mettle over the course of Kohl’s 16-year chancellorship as a political heavyweight who emerged as one of the architects of reunification. As Kohl’s chief-of-staff and closest adviser, he forged links with officials in the communist east and oversaw East German leader Erich Honecker’s state visit to West Germany in 1987.

With the abrupt collapse of Soviet power in eastern Europe and uprisings against communist governments in the Warsaw Pact in 1989, Schaeuble led the west’s team of negotiators to craft the treaty that dissolved the German Democratic Republic and merged it into the Federal Republic.

Schaeuble almost didn’t survive long into newly reunified Germany. Nine days after the states merged on Oct. 3, 1990, the CDU politician was stumping at a campaign stop in the southwestern town of Oppenau, near his birthplace. A mentally unstable assailant pulled out a pistol and fired three shots at Schaeuble, one of which struck him in the back.

Although he recovered, the incident left him paralyzed below the third vertebra, unable to walk for the rest of his life.

He soon reclaimed his position at the center of the CDU. The following year he gave an impassioned Bundestag speech in favor of transferring Germany’s seat of government from Bonn to Berlin.

“The decision in favor of Berlin is also a decision for overcoming the division of Europe,” Schaeuble told parliament. Schaeuble is credited with shifting votes in favor of the move, which passed on June 20, 1991, by a margin of 338 to 320.

Financing Scandal

Kohl’s heir-apparent finally took the reins of the CDU, as opposition leader when Social Democrat Gerhard Schroeder defeated Kohl in the 1998 election and became chancellor. Schaeuble’s chairmanship lasted less than two years.

Schaeuble grappled with revelations of secret accounts used by the CDU under Kohl and a network of donors and party affiliates to funnel undeclared money. He admitted to having received a cash donation of 100,000 deutsche Marks ($57,000) from weapons dealer Karlheinz Schreiber, though his handling of the money was disputed by a former party treasurer.

The sudden loss of credibility was devastating for a politician who had crafted a reputation for moral rectitude. He announced in February 2000 that he wouldn’t run for re-election as party chairman, clearing the way for Merkel, the party’s general secretary who had maintained a safe distance during the Kohl years from those dragged down by the scandal.

The son of a tax consultant, Schaeuble was born Sept. 18, 1942 in Freiburg. He studied law and economics in his hometown and in Hamburg, joining the CDU in 1965 after years of involvement in its youth corps.

Schaeuble leaves behind his wife, Ingeborg, and four children.

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