Once a star and back

Olaf Scholz flies to Washington while the SPD, Greens and FDP are fighting for a coalition. What irritates some in Berlin could, however, help the finance minister to become chancellor.

When Olaf Scholz enters the world stage in Washington, he first wants to announce his success in English: “This is a very special moment,” says the finance minister, who would like to become Germany’s next chancellor. Behind him is the White House, which he visited as the backdrop for his statement on the global minimum tax. Before him the German and also the international press. Next to him is the Canadian Treasury Secretary Chrystia Freeland. She praises him profusely.

“Thank you very much, Olaf,” says Freeland. She is very happy to be here with him. Because it was personally he who had fought for years in particular for the global minimum tax of 15 percent for companies. For a moment, Scholz inclines his head gently towards his allies. It seems like he would like to say thank you very quietly.

Olaf Scholz with Canada’s Finance Minister Chrystia Freeland. (Source: imago images)

It’s Wednesday morning in Washington. Scholz, Freeland and the other G20 and G7 finance ministers are currently negotiating a binding final document at the annual IMF autumn meeting in Washington. This important final chord is also the reason for Scholz’s trip to the USA, which falls in the middle of the traffic light sounding in Berlin. That’s why he’s just in the USA: around a day and a half, tightly timed, little sleep. Completion is to be announced in Berlin on Friday in order to enter into the coalition negotiations.

Scholz is in demand like never before

136 countries have agreed to participate in the project to tax the big global corporations at least minimally. The minimum tax should apply as early as 2023. This will end the “race to the bottom”, says Scholz proudly, referring to the competition between countries to attract companies with ever lower tax rates. Nobody expected that a few years ago, says the finance minister. His implicit message: Just as little as most with my chancellorship.

This trip to Washington is of course also about being seen. The SPD minister can enjoy it. He is in demand in the US capital like never before. The international press in particular wants interviews. But Scholz is not yet Chancellor. And that’s why he has to get back to Berlin quickly. “Before Christmas,” he says, the coalition should be in place. Then he wants to be chancellor.

A bit of putty for traffic light negotiations

The global minimum tax is not inconvenient for this plan. That not only has to do with the fact that Scholz has been fighting for them for years, so he can prove that he can do things. For Scholz it would also be a financial success that could help him with the traffic lights. The Ifo Institute predicts that Germany will have around five billion euros in additional income per year as a result.

That would only be around one percent of the current federal budget. But it is money that Scholz can use well if he wants to reconcile the wishes of the FDP (no tax increases), the Greens (large climate investments) and the SPD (a lot of social equality).

The USA, of all places, whose finance minister Janet Yellen Scholz also met during the G20 and G7 consultations, could still become a problem. A new tax law might have to go through the US Senate, which is chronically blocked. A tricky situation to which the possible Chancellor Scholz is already preparing for many other issues with his transatlantic friends.

Scholz also wants to bring a little of the glamor of international pomp from his visit to Washington to Berlin, where he will land on Thursday morning. He underscores his claim to leadership on the international stage, emphasizes – entirely Angela Merkel – multilateralism and lets the world know of his negotiating skills and international networking. Pictures in front of the White House are always helpful for this.

When does Olaf Scholz meet Joe Biden?

However, Scholz has never met the incumbent US President Joe Biden. That didn’t happen on this short trip to Washington either. In terms of protocol, it would also be a step too early for that. However, there could be a first meeting with Biden at the end of October. The Chancellor travels with Scholz to the G20 summit in Rome. And Scholz could also come to the climate summit in Glasgow, which is important for Joe Biden. However, that has not yet been decided, according to the Ministry of Finance.

At Washington’s Dulles Airport, Scholz boarded the Airbus ready for flight on Wednesday evening, initially as finance minister. In his luggage he has the historic final document of the G20 finance ministers. It contains this important sentence: “We endorse the final political agreement.” In diplomatic language, this formula – “We are in favor of the final political agreement” – is the much more binding variant than a mere “We take note”.

Back in Berlin, however, Scholz could quickly notice that it can be more complicated to bring three parties together in Germany than 136 countries. But Scholz is sure that he can do that too. The government should be in place by Christmas. And the next New Year’s address will come from him accordingly.

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