German chancellor Olaf Scholz had a trying week. Last Tuesday he looked on in silence as the Palestinian president Mahmoud Abbas claimed Israel had carried out “50 holocausts” against his people since 1947. Though Abbas has form in relativising the Holocaust, Scholz was caught off guard. His belated response, long after Abbas had left Berlin, sparked almost as much outrage in Israel as Abbas’s remarks – and raised questions about the German leader’s judgment.
Similar questions hung over his appearance before a Hamburg parliamentary inquiry on Friday. He was there to answer questions on whether, as governing mayor of Hamburg, he intervened to help a private bank avoid a ¤47 million tax demand in 2016 arising from its involvement in a complicated and illegal scheme. Scholz insists he has no detailed memory of conversations with the bank’s owners, a claim many do not believe given Hamburg’s tax office dropped its demand six days after the last meeting.
Scholz already testified at a Hamburg inquiry into the affair in April 2021, then still federal finance minister in Berlin. His return as chancellor gave Friday’s appearance another dimension entirely. Last week Scholz snapped at journalists that two-and-a-half ears of probing – by them and investigators – had not turned up anything incriminating. The implication: he has better things to do grappling with Russia’s war on Ukraine and spiralling inflation.
It is true that Germans are more worried about their energy bills than what may have happened in Hamburg six years ago. Many of the details of the affair were known before last September’s election and voters still chose his Social Democratic Party (SPD) to lead the next government.
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And though no firm evidence has emerged proving the Scholz intervention was key to the tax decision, dogged investigators continue to turn up tantalising clues. Also, incriminating diary entries by the Hamburg banker and text messages from tax official involved, all references to the bank, the meetings and the tax affair have been wiped from Hamburg town hall email servers.
Even if their probe ends without any findings against Scholz, as is likely, this is not a good look for the chancellor. Germans have high ethical expectations of their leaders, particularly after the Merkel era, when such claims would have been unthinkable.
Scholz won office last year on a platform of “respect” for low-earners and key workers. That the cash-strapped exchequer forfeited €47 million from a bank tainted by tax corruption is bad enough. The idea that politicians nudged such a deal over the line is a disastrous distraction at best. More revelations would be a serious credibility blow in an uncertain era when Europe expects leadership from the German chancellor.