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June 24, 2019

Germany should not dictate the economic policy of its Eurozone partners

Olaf ScholzGermany should not dictate the economic policy of its Eurozone partners, commented Social Democrat Olaf Scholz, who is expected to become finance minister in the new coalition government of German Chancellor Angela Merkel. His comment is the clearest sign so far that Germany intends to mitigate its stance on strict budgetary discipline in the European Monetary Union.

“We do not want to dictate to other European countries how to develop [economically]”, says Scholz, the pragmatic mayor of Hamburg. He is expected to succeed Conservative Wolfgang Schaeuble, who has been the symbol of austerity measures for eight years. “Surely mistakes have been made in the past”, added Olaf Scholz, criticizing delicately Schauble, who bundled the rescue aid to Greece and Portugal with conditions for unpopular cuts in spending.

Merkel made painful concessions to the Social Democrats, including giving them the influential post of finance minister to secure a fourth term after an unbeatable election victory in September.

A total of 464,000 people from the German Social Democratic Party have to vote in the mail whether they support the coalition agreement with Merkel or not. The results of the vote are expected to become known on March 4th.

Merkel’s decision to surrender the Social Democrats Finance Ministry has annoyed some members of her conservative block, where Schaeuble has been almost cowered because of his defense of strict budgetary rules.

Trying to calm conservatives’ concerns that the next government will spend more than it can afford, Scholz said that the Social Democrats will keep Schaeuble’s balanced budget policy.

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