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POLITICS

Olaf Scholz: Germany’s staid but steady next chancellor

Often described as austere, Social Democrat Olaf Scholz nonetheless managed to inspire German voters in this year's election with a campaign.

Olaf Scholz at SPD party conference
Olaf Scholz (SPD), Germany's next Chancellor, speaks at a party conference ahead of a vote on the coalition agreement with the SPD, Greens and FPD. Photo: picture alliance/dpa | Annette Riedl

Scholz, 63, is on the brink of becoming the next German chancellor, replacing Angela Merkel who is leaving the political stage after 16 years.

The Social Democrats (SPD) had begun the election campaign at rock bottom in the polls, with many completely writing off Scholz’s chances of heading the next government — so much so that he doesn’t even have an official biography.

But Scholz managed to stage a stunning upset, beating Merkel’s conservatives by positioning himself as the best candidate to continue her legacy, even adopting her famous “rhombus” hand gesture on a magazine cover.

Unlike his rivals, he also managed not to make embarrassing mistakes during a campaign that drew on his reputation as a quiet workhorse, using the slogan “Scholz will sort it”.

After a shorter than expected bout of post-election coalition haggling, Scholz has managed to cobble together an alliance with the Greens and the liberal FDP.

Once described by Der Spiegel magazine as “the embodiment of boredom in politics”, Scholz has been slowly working his way up the ranks since the 1970s.

Born in the northern city of Osnabrück, he joined the SPD’s youth movement in 1975 and was pictured at various peace demonstrations sporting wool sweaters and an unruly crop of long hair.

READ ALSO: Scholz’s election as German chancellor planned for December 8th

‘Scholzomat’

He became vice-president of the movement in the 1980s but failed to become its leader because he was considered too left-wing, though he later aligned to a more centrist course.

After training as a lawyer and founding his own law firm specialised in labour issues in 1985 — now minus the hair — Scholz was elected to the national parliament in 1998.

During his 2002-2004 stint as the SPD’s general secretary, he earned the nickname “Scholzomat” for his dry yet tireless defence of the  unpopular labour reforms of then-chancellor Gerhard Schroeder.

Olaf Scholz
Olaf Scholz sits on the sidelines at the SPD party conference in Berlin on December 6th, 2021. Photo: picture alliance/dpa | Annette Riedl

READ ALSO: KEY POINTS: Germany’s next government unveils coalition pact

‘Bazooka’ 

As finance minister and vice-chancellor under Merkel from 2018, he also suspended Germany’s cherished constitutional debt brake to unleash a trillion-euro “bazooka” to ward off the effects of the coronavirus pandemic on the economy.

However, he is generally seen as fiscally conservative and has insisted on a return to the no new debt policy by 2023 — a rule included in the coalition deal.

This cautious approach has at times left him marginalised within his own workers’ party, overlooked in a leadership vote in 2019 in favour of two relatively unknown left-wingers.

But the SPD succeeded in uniting behind him as its chancellor candidate in this year’s election campaign.

Scholz lives in Potsdam on the outskirts of Berlin with his wife Britta Ernst, also an SPD politician. They have no children.

He saw his fair share of scandals as finance minister, including the Wirecard fraud debacle and allegations that the FIU anti-money laundering authority under his auspices had failed to report potential wrongdoing to the relevant authorities.

But his calm demeanour has helped him weather the turbulent times and found favour with fellow politicians — including FDP leader Christian Lindner, who has described him as a “strong leader”.

“He has the experience and professionalism to lead this country into a good future,” Lindner said.

Merkel, too, has said she will be able to “sleep soundly” with Scholz as her replacement.

By Femke Colborne

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POLITICS

Swedish government offers tax deferral to businesses

High energy prices and high inflation are hitting Sweden's businesses hard. With energy price subsidies for these consumers delayed, the government is now extending existing tax deferral schemes implemented during the pandemic to ease the pressure.

Swedish government offers tax deferral to businesses

Finance Minister Elisabeth Svantesson and Energy and Business Minister Ebba Busch announced the scheme at a press conference on Thursday.

“Many, many companies are now struggling with their liquidity,” Svantesson said.

The deferral scheme is similar to that proposed by the previous government in order to ease the effects of the Covid-19 pandemic on companies, which was due to run out in February. The government has now proposed extending this scheme, allowing companies to delay their tax payments.

“These proposals will make things easier for many businesses,” Svantesson said.

The tax deferral scheme is not, Busch explained, being introduced as a replacement for the energy price subsidy for businesses which was supposed to be paid out “before Christmas” and which has now been withdrawn temporarily while the government figures out how it can be introduced without breaking EU law.

“No, rather this is a measure we’ve been looking at for a while, which should be seen as a complement,” she said.

According to rough estimates, the government believes that around 12,000 companies will apply for tax deferral, which would mean around 16 billion kronor in tax payments being delayed until a later date.

Företagarna, Sweden’s largest organisation of business owners representing around 60,000 companies across different branches, has welcomed the move, despite also voicing criticism that it’s just pushing these problems further into the future.

“It’s a loan and all loans need to be paid back over time,” Företagarna’s CEO Günther Mårder said.

Företagarna did, however, agree that the scheme will be necessary for some businesses to survive.

“Most companies going under are doing so because of liquidity problems, and this new measure will strengthen liquidity in the short-term,” Mårder said, adding that the measure could “save businesses”.

However, with many businesses already owing back taxes delayed during the pandemic, Mårder believes this could just be adding to the mountain of debt already faced by some companies.

“It means it will be record-breakingly difficult to get over this hump,” he said. “What they’re doing now is pushing problems into the future, and of course, that’s also a solution.”

The Confederation of Swedish Enterprise is positive towards the government’s proposal, adding that the many Swedish companies are currently in a difficult situation.

“Since the repayment of bottleneck revenues [energy price subsidies] is delayed, it is good and fair that companies have the opportunity to extend their tax deferrals,” Jonas Frycklund, vice chief finance officer of the Confederation of Swedish Enterprise wrote in a statement.

“This will lower the risk of having to let employees go unnecessarily.”

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