The last week in Germany was a summary of what has happened in the past eight months since Olaf Scholz became the country’s chancellor. Corruption and rising energy prices were the issues that stood out in Europe’s largest economy.
On Friday (19), Scholz spent nearly four hours in front of the Hamburg Parliament, responding to the “CumEx Files” tax scandal, in relation to the tax optimization created by banks, which allowed foreign investors to reduce taxes paid on your dividends. Dozens of people were indicted in Germany, including bankers, brokers, lawyers and financial advisers.
The case deals, among others, with the evasion of around 47 million euros in taxes that the bank MM Warburg Co. owed to the city since 2016. At that time, Olaf Scholz was mayor of Hamburg.
The current chancellor denies any involvement in the case, but the matter had greater repercussion than during the campaign for the chancellery in 2021, due to the period of economic, political and social instability in the country. The suspicion of Scholz’s involvement in the corruption schemes increases criticism both from the right, mainly in the Christian Democratic Union party, and from other branches of the left, such as the Die Linke (Left) party.
Faced with rising fuel prices, during an event where the chancellor was to propose economic solutions in the small town of Neuruppin, near Berlin, protesters chanted “Liar, traitor”.
According to a survey by the Insa Institute, 44% of Germans said they were willing to protest against energy prices in the country.
In addition to Scholz’s clumsy management, he is now also responsible for old political decisions that made the country dependent on Russian energy and the Chinese economy, which now make Germany suffer so many consequences.
Dependence on Russia and China
Russian gas corresponds to 55% of the fuel present in Germany. If there is a complete withdrawal of Russian energy, Germany could finally go into recession. Furthermore, since 2016, China has been Germany’s biggest trading partner, one of the biggest importers in the German auto market.
In March, German Finance Minister Christian Lindner told German newspaper Zeit that he was uneasy about the country’s economic dependence on China and Russia. “We must diversify our international relations, including our exports,” he said in an interview with the newspaper.
At the time, in a press conference, the German chancellor stressed that the market transition, however, “could not be done overnight”.
Green bet didn’t work
In 2019, Germany created a climate protection law, which provides for a 55% reduction in greenhouse gases by 2030 and carbon neutrality by 2050 in the country.
Despite this ecological drive, the growth in world demand for energy, resulting from the war in Ukraine, means that German plants need to burn more coal and this could delay the transition to green energy.
Unlike neighboring countries such as France, which invest in nuclear energy as an alternative to fossil fuels, Germany, under the leadership of Angela Merkel, decided to disable nuclear power plants, due to the possible risks of leakage. An apparently sustainable option, but, in practice, it is not at all ecological and has even harmed the country’s economy, with the most expensive energy on the continent.
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