Peer Steinbrück

Peer Steinbrück
Minister of Finance
In office 22 November 2005 – 28 October 2009
Chancellor	Angela Merkel
Preceded by	Hans Eichel
Succeeded by	Wolfgang Schäuble
Minister President of North Rhine-Westphalia
In office 6 November 2002 – 24 June 2005
Preceded by	Wolfgang Clement
Succeeded by	Jürgen Rüttgers
Personal details
Born	10 January 1947 Hamburg, West Germany (now Germany)
Political party	Social Democratic Party
Alma mater	University of Kiel
Signature

Peer Steinbrück (born 10 January 1947) is a German social democratic (SPD) politician. He was the SPD candidate for Chancellor of Germany in the 2013 federal election. From 2002 to 2005 he was the 8th Minister President of North Rhine-Westphalia. From 2005 to 2009 he served as German Federal Minister of Finance in the cabinet of Angela Merkel. He was nominated by his party as opposition candidate for Chancellor on 28 September 2012.^[1] He is generally considered a member of the more conservative wing of the party.

Early life and education

Steinbrück was born in Hamburg, on 10 January 1947, to Ilse (née Schaper; 1919–2011) and Ernst Steinbrück (1914–1998), an architect born in Danzig. After having been trained as an officer of the reserve of the Bundeswehr, Steinbrück studied economics at the University of Kiel. He graduated in 1974.

Career

Early beginnings

After graduation Steinbrück worked for several German ministries and, from 1978 to 1981, in the office of German Chancellor Helmut Schmidt. He held positions in the Permanent Representative Office of the Federal Republic of Germany in East Berlin from 1981 to 1985. In the 1980s, Steinbrück was the chief of staff to the Minister President of North Rhine-Westphalia, Johannes Rau.

In 1993, he became the State Minister of Economic Affairs and Infrastructure in the state of Schleswig-Holstein. He then returned to North Rhine-Westphalia, where he became the Minister of Economic Affairs and Infrastructure in 1998 and Finance Minister in 2000.

Minister President of North Rhine-Westphalia, 2002-2005

From 2002 to 2005 Steinbrück served as the 8th Minister President (Ministerpräsident or governor) of North Rhine-Westphalia.^[2] He headed a coalition government between the SPD and the Green Party.

In 2003, Steinbrück and Roland Koch, the Christian Democrat premier of Hesse, together drew up a plan to reduce tax breaks and subsidies, including those on coal. The subsidies were a particularly sensitive issue in North Rhine-Westphalia, where most of the coal mines are located. Nevertheless, Steinbrück and Koch agreed that all subsidies were to be reduced by 12 percent over several years.^[3] Steinbrück was a supporter of the so-called "Agenda 2010".^[4]

In the state election on 22 May 2005, Steinbrück's SPD lost to the Christian democratic (CDU) opposition. This loss also had consequences for federal politics: then German Chancellor Gerhard Schröder, who already was enfeebled by weak opinion polls and criticism within his own party, announced plans to call an early federal election for the Bundestag. This ultimately resulted in the 2005 federal election.

Federal Minister of Finance, 2005-2009

After the 2005 federal election, SPD and CDU formed a Grand Coalition under the leadership of new Chancellor Angela Merkel (CDU). Peer Steinbrück became finance minister of Germany in November 2005.^[5] He was charged with reducing Germany's budget deficit, curbing public debt and introducing changes in the taxation system.^[3] He oversaw and orchestrated the regulatory and fiscal efforts to counter the largest financial and economic crisis in post-War history.

From 2005, Steinbrück also served as deputy chairman of the SPD. Ahead of the 2009 elections, German foreign minister Frank-Walter Steinmeier included Steinmeier in his shadow cabinet of 10 women and eight men for the Social Democrats’ campaign to unseat incumbent Angela Merkel as chancellor.^[6]

In a joint article in the Financial Times on 14 December 2010, Steinbrück and Steinmeier proposed to solve the European debt crisis with "a combination of a haircut for debt holders, debt guarantees for stable countries and the limited introduction of European-wide bonds in the medium term, accompanied by more aligned fiscal policies."^[7] In February 2011, Steinmeier proposed Steinbrück as a candidate to lead the European Central Bank.^[8]

Candidate for Federal Chancellor, 2012-2013

On 9 December 2012 an extraordinary National Assembly of the SPD elected Steinbrück, with 93.45 percent of the votes, as candidate for Federal Chancellor, to run in the 2013 federal elections against Angela Merkel. Sigmar Gabriel, the party’s chairman at the time, who had also been considered a possible candidate, said the leadership had agreed to nominate Steinbrück after Frank-Walter Steinmeier, the party’s parliamentary leader, withdrew from the contest.^[9]

During his election campaign, Steinbrück promised to introduce rent controls, to raise taxes and use those funds for education and infrastructure.^[10] He also accused Merkel of showing a lack of passion for Europe in the euro crisis because she was brought up in communist East Germany.^[11] In the run-up to the elections, he criticised Merkel's support for hardline austerity measures in indebted eurozone countries^[12] and reiterated his support for the euro, saying that its demise would "throw back European unification by 20 to 30 years" and result in currency appreciation that would "destroy any business."^[13] He also travelled to Greece for meetings with President Karolos Papoulias, Prime Minister Antonis Samaras, Finance Minister Yannis Stournaras and PASOK chairman Evangelos Venizelos.

On foreign policy issues, Steinbrück criticized Merkel for not joining Germany's allies in their military efforts against Libyan dictator Muammar Gaddafi. Also, he promised he would radically curtail German arms exports to countries such as Saudi Arabia.^[14]

In three stages from mid-May 2013, Steinbrück announced the twelve members of his shadow cabinet, including Cornelia Füllkrug-Weitzel, Gesche Joost, Yasemin Karakaşoğlu, Christiane Krajewski, Karl Lauterbach, Matthias Machnig, Thomas Oppermann, Florian Pronold, Oliver Scheytt, Klaus Wiesehügel, Manuela Schwesig and Brigitte Zypries. He signalled his support for Jürgen Trittin, at the time co-chairman of the Green Party’s parliamentary group, to become minister of finance in the case of his win.^[15]

Although Steinbrück soon won the endorsement of former Chancellors Gerhard Schröder and Helmut Schmidt,^[9] his gaffe-prone campaign never gained traction against the popular Merkel.^[16] His previously established reputation as a crisis manager who had played a frontline role in fighting the global financial crisis was overshadowed by faux pas throughout the campaign.^[17] He clashed with Sigmar Gabriel, the party leader, whom Steinbrück said had not been supportive of his campaign.^[12]

On 22 September, Steinbrück's Social Democrats won 25.7 percent, while Merkel's CDU and its Bavarian sister party CSU together won 41.5 percent of the vote.^[18] Following the elections, Steinbrück was part of the SPD delegation to hold exploratory talks with the CDU/CSU on forming a coalition government.^[19]

Member of the Bundestag, 2013–present

As member of parliament, Steinbrück currently serves on the Committee on Foreign Affairs and as chairman of the German-American Parliamentary Friendship Group.

In March 2015, Steinbrück joined the Agency for Modernization of Ukraine, an initiative led by Dmitry Firtash to develop a comprehensive plan of political and economic reforms in the country.^[20]

In September 2015, Steinbrück announced that he would not stand in the 2017 federal elections but instead resign from active politics by the end of the parliamentary term.^[21]

Political positions

Economic policy

Steinbrück has been a prominent speaker for the SPD, especially on economic matters.

During a 2007 visit to Washington for meetings with the Treasury secretary, Henry M. Paulson Jr. and Ben S. Bernanke, chairman of the Federal Reserve, after the collapse of Amaranth Advisors, Steinbrück lobbied for the development of an internationally accepted "code of conduct" for the hedge fund industry, arguing that a "sizable number" of hedge funds "are not behaving properly."^[22]

Steinbrück predicted in 2008, in the wake of Lehman Brothers’s bankruptcy, that the United States’ days as a financial superpower were numbered.^[9] In December 2008 interview with Newsweek, he controversially attacked the British Keynesian approach to economic policy.^[23][24] He raised scepticism about the effectiveness of large fiscal stimulus packages and criticised the resulting increase in public debt. His comments led Steinbrück into a highly public press battle with Paul Krugman, the Nobel laureate economist and New York Timescolumnist.^[25] An adherent to Keynes' theory that government spending creates growth, Krugman wrote in December 2008—in a direct attack on Steinbrück—that the primary "multiplier effect" that government spending programs were having was that of "multiplying the impact of the current German government's boneheadedness."^[26]

During his time as German Finance Minister, Steinbrück repeatedly accused the United Kingdom of pandering to the City of London by hindering efforts to reform global financial markets.^[27] In 2009, Steinbrück opposed any plans by the G-20 major economies to limit the size of banks to avoid individual institutions wielding too much influence in future and posing a risk.^[28] At the 2009 G-20 Pittsburgh summit, he supported a Dutch proposal to limit banking executives' bonuses to the level of their fixed annual salary.^[29][30] Also, he called for a global tax to be imposed on financial transactions in a bid to end what he derided as "binge-drinking" on markets.^[31]

In a 2010 interview on German television, it appeared that Steinbrück, who had adopted a very critical stance of the shadow banking system, attributed characteristics of the private equity industry to hedge funds.^[32]

In 2012, Steinbrück tabled a plan for sweeping financial regulation that he intended to be a main plank of his election platform. It included compelling banks to finance a €200 billion rescue fund, and splitting investment from retail banking.^[33]

European integration

At the 2006 meetings of the IMF and the World Bank in Singapore, Steinbrück argued that, as the world's third largest economy after the US and Japan, Germany must keep its influence in the IMF amid wide-ranging reform of the institution, ruling out suggestions that the eurozone members should have only one seat on the board as part of the planned overhaul of IMF members' votes.^[34]

Other activities

• Berlin Palace–Humboldtforum Foundation, Deputy Chairman of the Board of Trustees
• Borussia Dortmund, Member of the Supervisory Board
• Helmut and Loki Schmidt Foundation, Deputy Chairman
• IG Bergbau, Chemie, Energie, Member
• KfW, Member of the Supervisory Board (2006-2009)
• ZEIT-Stiftung, Member of the Board of Trustees

Controversy

Steinbrück has been labelled by the media as a sharp-witted political pugilist whose frank opinions have occasionally attracted controversy.^[35]

Business activities

As soon as he was nominated as the Social Democrat’s challenger to German Chancellor Angela Merkel in the 2013 federal elections, Steinbrueck announced he would quit the board of steel conglomerate ThyssenKrupp and all outside work, though not an unpaid seat on soccer club Borussia Dortmund's board where he saw no conflict of interest.^[36] His decision prompted a slew of criticism of his high earnings outside the Bundestag from Merkel's center-right coalition but also from the SPD's left wing and from anti-graft campaigners. The seat on ThyssenKrupp's board and all but four of the other 85 appointments and engagements listed for the time between 2009 and 2012 were in excess of 560,000 euros.^[36]

Later in his campaign, Steinbrück canceled a speech at Bank Sarasin & Cie after Süddeutsche Zeitung reported that the Swiss private bank was being investigated by German prosecutors for possible tax evasion.^[17] Soon after, he declared he had earned 1.25 million euros ($1.6 million) by giving 89 speeches between 2009 and 2012 at companies and banks including Deutsche Bank, JPMorgan Chase, BNP Paribas, Sal. Oppenheim, Union Investment, Ernst & Young, Freshfields Bruckhaus Deringer and Baker & McKenzie.^[17] This sum was in addition to his salary as a member of parliament, which was over 7,500 euros a month.^[37] The data, however, also showed Steinbrück gave 237 other addresses for free to schools and charities, and got industry lobby groups to donate to charity instead of paying him.^[37] At the same time, he said the chancellor’s salary, at about 250,000 euros annually, is too low because regional savings bank directors are paid more.^[38]

Namibia trip in 2007

In April 2007, when Germany held the presidencies of both the European Union and the G7, Steinbrück was criticized for going on holiday with his family in Namibia instead of attending a meeting of G7 finance ministers in Washington and for refusing the offer of other G7 members to succeed Gordon Brown as chair of the International Monetary and Finance Committee (IMFC).^[39]

Diplomatic tensions with Switzerland and Liechtenstein

As finance minister, Steinbrück criticized Germany's neighbours in a row over tax havens.^[40]

In the wake of German investigations against the LGT Group of Liechtenstein in 2008, Steinbrück threatened that Germany would impose a levy on all fund transfers to the principality, in effect reinstating pre-1990s-style capital controls, if the country did not change its ways.^[41] Speaking to reporters in Paris after a conference on measures to combat tax avoidance, he said Switzerland deserved to be on a tax haven "black list" being drawn up by the Organization for Economic Cooperation and Development because Swiss investment conditions encouraged some German taxpayers to commit fraud.^[42] He called on other European countries to "use the whip" on Switzerland over its tax havens, likening the Swiss to "Indians" running scared from the cavalry.^[43]

His criticism of the Swiss banking secrecy caused some tensions between Germany and Switzerland.^[44] The German ambassador to Bern was summoned to the foreign ministry to hear Switzerland's official reaction to what Foreign Minister Micheline Calmy-Rey described as Steinbrück's "contemptuous and aggressive" comments.^[45]

Comments on Italian election results

On 26 February 2013 Steinbrück said he was "appalled that two clowns have won" Italy's February 24–25 election. The vote was actually inconclusive with no party garnering a majority in parliament, although the anti-establishment party of commentator and comedian Beppe Grillo surged to about one fourth of valid votes. In reaction, Italian President Giorgio Napolitano cancelled a dinner in Berlin with Steinbrück, who was German opposition's chancellor candidate.^[46]

President Napolitano, an 87-year-old former Italian communist-party representative with no natural affinity for Berlusconi or Grillo, made clear that such a comment was disrespectful towards Italian electors and that he was finding the sentences "out of place".^[47] As Italy's president, he had the duty to nominate a new government and, because of the electoral results, he had necessarily to keep relationships with both Grillo and Berlusconi.

Recognition

• 2011 – University of Düsseldorf, Honorary Doctorate

Personal life

Steinbrück's wife, Gertrud, is a former biology and politics teacher at a high school in Bonn. They have three children.^[12]

References

1. Melissa Eddy: Merkel's Former Finance Minister to Run Against Her. nytimes.com. Retrieved 22 September 2012
2. Moulson, Geir (28 September 2012). "Peer Steinbrueck, Former Finance Minister, To Challenge German Chancellor Angela Merkel In 2013". The Huffington Post. AP. Retrieved 28 September 2012.
3. Judy Dempsey (13 October 2005), New German Finance Minister Likely to Help Merkel's Agenda New York Times.
4. Wolfgang Dick (27 September 2013), http://www.dw.de/merkel-challenger-bids-farewell-to-politics/a-17102302 Merkel challenger bids farewell to politics] Deutsche Welle.
5. Bernstein, Richard (23 November 2005). "Merkel Takes Office in Germany and Announces Coalition Cabinet". The New York Times. Retrieved 7 July 2013.
6. Bertrand Benoit (30 July 2009), Lagging SPD starts campaign Financial Times.
7. Peer Steinbrück and Frank-Walter Steinmeier (14 December 2010), Germany must lead fightback Financial Times.
8. Erik Kirschbaum (13 February 2011), Steinbrueck says not interested in ECB's top job Reuters.
9. Melissa Eddy (28 September 2012), Merkel’s Ex-Finance Minister to Oppose Her New York Times.
10. Erik Kirschbaum (8 August 2013), Merkel challenger vows to rein in banks, hike taxes on wealthy Reuters.
11. Noah Barkin (20 March 2014), Germany's Russian rethink: How Merkel lost faith in Putin Reuters.
12. Profile: Peer Steinbruck Al Jazeera, 16 September 2013.
13. Tony Czuczka, Rainer Buergin and Patrick Donahue (22 September 2013), Merkel Asks for Third Term as Steinbrueck Seeks Election Upset Bloomberg News.
14. Charles Hawley (5 June 2013), Merkel Challenger Attacks Her Austerity Policy Spiegel Online.
15. Peer Steinbrück’s "competence team": the signal is political change, pure and simple! DB Research, German Policy Watch, 11 June 2013.
16. Stephen Brown and Noah Barkin (22 September 2013), Merkel romps to victory but faces tough coalition choices Reuters.
17. Joseph de Weck (30 January 2013), Steinbrueck Hits Reset in German Election Campaign After Gaffes Bloomberg News.
18. Merkel's conservatives win German vote Al Jazeera, 23 September 2013.
19. Patrick Donahue and Arne Delfs (30 September 2013), Germany Sets Coalition Talks Date as Weeks of Bartering Loom Bloomberg News.
20. The Agency for Modernisation of Ukraine presented at the ‘Ukraine Tomorrow’ International Forum British Ukrainian Society, press release of 3 March 2015.
21. Daniel Friedrich Sturm (September 11, 2015), Steinbrücks Abgang ist eine Zäsur für die SPD Die Welt.
22. Steven R. Weisman (16 March 2007), Germany Says Hedge Funds Should Devise Conduct Code New York Times.
23. Stefan Theil (6 December 2008), Peer Steinbrück on the Global Economic Crisis Newsweek.
24. "German ridicule for UK policies". BBC News. 10 December 2008. Retrieved 10 December 2008.
25. Charles Hawley (28 September 2012), Merkel's Challenger: Does Peer Steinbrück Have the Stuff to Be Chancellor? Spiegel Online.
26. Paul Krugman (11 December 2008), The economic consequences of Herr Steinbrueck New York Times.
27. Huw Jones (15 July 2009), Progress in battle over EU hedge fund law Reuters.
28. Madeline Chambers (4 September 2009), No sense in G20 limiting bank size: German finance minister Reuters.
29. James Vicini and Dave Graham (20 September 2009), Obama wants G20 to discuss rethink of global economy Reuters.
30. Gernot Heller (25 September 2009), German finmin lauds G20 pact on bank bonuses Reuters.
31. Bertrand Benoit (12 September 2009), Steinbrück calls for global finance tax Financial Times.
32. "Broadcast of interview on Beckmann". ARD (broadcaster). Retrieved 19 February 2011.
33. Quentin Peel (28 September 2012), Steinbrück chosen to challenge Merkel Financial Times.
34. Germany Opposes Single Voice for Euro Countries at IMF Deutsche Welle, 16 September 2006.
35. Chris Bryant (9 December 2012), Steinbrück attacks Merkel’s Europe stance Financial Times.
36. Stephen Brown (5 October 2012), Merkel's challenger rebuffs criticism of high earnings Reuters.
37. Steinbrück admits to over a million euros in lecture fees Deutsche Welle, 30 October 2012.
38. Michael Steen (19 September 2013), Peer Steinbrück moves to mobilise SPD voters for Germany election Financial Times.
39. Steinbrück's Holiday Woes: German Finance Minister Under Fire For G7 Absence Spiegel Online, 11 April 2007.
40. Nicholas Kulish (30 December 2012), In Germany, Merkel’s Main Rival Appears to Stumble From Gaffe to Gaffe New York Times.
41. Bertrand Benoit and Vanessa Houlder (6 March 2008), Revenge on Vaduz Financial Times.
42. Germany wants Switzerland on a tax haven "black list" International Herald Tribune, 21 October 2008.
43. Stephen Brown (10 April 2013), Straight-talking Steinbrueck struggles to debunk Merkel "cult" Reuters.
44. "Germany's Wild West Tone Angers the Swiss". Spiegel Online. Retrieved 12 July 2009.
45. Stephen Brown (10 April 2013), Calmy-Rey and Steinmeier try to turn the page swissinfo, 1 April 2009.
46. "Italy president snubs German candidate over clown gaffe". Reuters. Retrieved 27 February 2013.
47. "Steinbrück Raises Ire of German Clowns". Spiegel.de. Retrieved 14 August 2013.

External links

• Peer Steinbrück's Homepage (German)
• Interview with Peer Steinbrück: "Kennen Sie denn Hawaii-Toast?" (German, sbznet.de)