Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Olaf Scholz’s latest problem: Did he waive bank’s €47M tax bill?

Olaf Scholz’s latest problem: Did he waive bank’s €47M tax bill?

German chancellor will face an official inquiry into a 2017 decision when he was mayor of Hamburg.

What did Olaf Scholz know, and when did he know it?

The answers could well determine the future of the German chancellor, who will face an official inquiry into a 2017 decision when he was mayor of Hamburg to not collect €47 million in tax arrears from a private local bank accused of defrauding the government.

Scholz’s Friday grilling by a parliamentary committee in Hamburg promised to be a routine affair until reports in German media on Wednesday cited new evidence that his inner circle knew more about the plan to give the bank — M.M. Warburg — a free pass.

The renewed focus on his Hamburg days could not come at a worse time for the chancellor. Less than a year after it was formed, Scholz’s three-party alliance with the Greens and liberal Free Democrats has been plagued by infighting as it struggles to cope with a host of crises triggered by Russia’s war against Ukraine, from a gas shortage to surging inflation and a flagging economy. Nearly two-thirds of Germans say they are unhappy with the government, according to a public television poll released earlier this month.

Scholz, who ran on a promise to maintain the centrist policies of his predecessor, Angela Merkel, has governed with the same cautious wait-and-see approach that characterized her tenure. Yet Scholz’s critics say the current geostrategic disruption requires more flexibility, strategic vision and boldness from Europe’s most powerful country.

That Scholz is not a politician comfortable reacting on the fly became apparent again this week during the Berlin visit of Palestinian leader Mahmoud Abbas, who accused Israel of visiting “50 Holocausts” on his people. Scholz, standing next to Abbas at a joint press conference in the German chancellery, said nothing to challenge his guest, triggering a storm of protest.

Though a clear majority of Germans say they are generally satisfied with Scholz’s job as chancellor, his personal approval ratings have stagnated and he ranks far behind prominent Green politicians. The reexamination of his Hamburg skeletons is unlikely to reverse that trend.

The scandal, known as the “Cum Ex affair,” involved a far-reaching scam by international banks, traders and hedge funds to defraud European governments of billions by claiming refunds for taxes they never paid. M.M. Warburg was a small, if prominent, player in the scheme.

The affair has dogged Scholz, who served as mayor of Hamburg until he became German finance minister in 2018, for years. In the absence of a smoking gun, Scholz’s insistence that he wasn’t involved in the decision to let the bank off the hook, and that he couldn’t remember meeting with top bank executives at the time, helped him dodge a reckoning. Until now.

The latest revelations surround Scholz’s claim that the 2017 decision not to collect the Warburg money was taken by the city’s financial administration without political influence. However, a cache of emails and confidential testimony detailed Wednesday by an investigative German media consortium (including public broadcaster NDR, business monthly Manager Magazin and current affairs weekly Stern) suggest that both Scholz and his closest associates were more involved in the decision than they let on.

The biggest revelation is an email from Scholz’s chief secretary, Jeanette Schwamberger, to his chief of staff in the spring of 2021 regarding a parliamentary committee request for details of Scholz’s meetings related to Cum Ex and Warburg. In the email, Schwamberger says Scholz, then German finance minister and a candidate for chancellor, needed to “sort out” (those are her quote marks) how to characterize a series of meetings he had as Hamburg mayor with SPD party colleagues lobbying for Warburg. That process ended up taking several weeks. In the end, Scholz sent a vague response one day before the hearing.

Authorities subsequently discovered more than €200,000 in cash in the safety-deposit box of one of the officials Scholz met with, Johannes Kahrs, a prominent SPD politician from Hamburg. Kahrs, who has declined to disclose the source of the money, faces a criminal investigation, as do several other of Scholz’s Hamburg associates.

When Palestinian leader Mahmoud Abbas accused Israel of visiting “50 Holocausts” on his people, Scholz said nothing to challenge his guest, triggering a storm of protest


Scholz has so far avoided a criminal investigation and prosecutors this week defended their decision not to pursue him.

Yet the political fallout of what a senior Hamburg tax office official under investigation called a “devilish plan” to help Warburg in a private text exchange will continue to loom over the chancellor as several inquiries into the affair, both parliamentary and criminal, continue.

Ever since questions first arose about his role in the Warburg case, Scholz has offered often contradictory, at times false, information on the frequency and nature of his meetings with the bankers and others connected to the affair.

During last year’s election campaign, he claimed not to have “any detailed, active memory” of his meetings with Warburg Chief Executive Christian Olearius. Yet in a closed-door, confidential meeting with parliamentarians investigating the affair in 2020, Scholz was more forthcoming, describing the general nature of his contacts, according to Wednesday’s reports.

Scholz’s main defense has been that the bank eventually ended up paying back the taxes anyway. But that only occurred because federal finance ministry officials overruled the Hamburg decision and forced Warburg to pay.

In light of the latest revelations, Scholz’s continued insistence, which he repeated last week, that there was “there was no political influence” seems untenable. The only real question is whether he knew about it.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
When the State Replaces the Parent: How Gender Policy Is Redefining Custody and Coercion
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
Nvidia posted better than expected results for the January quarter on Wednesday and forecast current quarter revenue above market estimates.
Ukrainian government intensifies pressure on Hungary and Slovakia with oil blockade
Britain’s Channel Crisis: Paying Billions While the Boats Keep Coming
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
United Nations Calls for Global Action Against Disinformation and Hate Speech Online
Tucker Carlson warns of an inevitable clash in Western societies over mass migration
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
Italy's PM Giorgia Meloni highlights record employment and economic growth
Chancellor Friedrich Merz Re-elected as CDU Leader, Opposes AfD Influence
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
Two teens arrested in France for alleged terror plot.
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Former President Yoon Suk Yeol Sentenced to Life in Prison for Abuse of Authority
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
German Chancellor Friedrich Merz calls for real name use on social media.
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
British Tourist Arrested at Hong Kong Airport After Meltdown and Vandalism
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
French District of Pas-de-Calais Introduces Immediate License Suspension for Drivers Using Mobile Phones
Volkswagen Targets €60 Billion in Cost Reductions as Sales Decline and Global Pressures Intensify
Eighty-Year-Old Lottery Winner Sentenced to 16.5 Years for Drug Trafficking
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Poland's President Advocates for Evaluating Independent Nuclear Weapons Development
Mayor of Serdobsk in Russia’s Penza Region Resigns After Housing Certificates Granted to Migrant Family Trigger Public Outcry
China’s EV Makers Face Mandatory Return to Physical Buttons and Door Handles in Driver-Distraction Safety Overhaul
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
Heineken announces cut of 6,000 jobs due to declining beer demand
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
×