Wolfgang Schäuble and Jacques Delors, archetypal German and French finance ministers who became bywords for fiscal stringency, left enduring yet somewhat melancholic imprints on European politics.
The two men, who died on 26 and 27 December aged 81 and 98 respectively, were key figures in reshaping Europe’s post-cold war architecture in the tumult of German unification in 1989-90 and the subsequent journey to a single European currency.
They depart the scene when the economic and strategic imperatives they espoused have fallen out of favour in their home countries – and their forcefully argued ideas on European integration face challenges on multiple fronts.
Delors, a one-time Banque de France official, was president of the European Commission for a decade from 1985. He was the institution’s most influential leader since the European Economic Community was established in 1957.
In 1988-89, more than a year before the fall of the Berlin wall, under a plan masterminded by French President François Mitterrand and German Chancellor Helmut Kohl, he led the Delors committee, mainly comprising European central bank governors. This set recommendations for an independent European central bank and a unified currency, eventually launched as the euro in 1999.
Delors won Thatcher support over European single market
Delors, finance minister from 1981-84, was a Christian Socialist who could appear on a higher moral plane than power-broking politicians and financial technocrats. His was a pugnacious piety. Like Schäuble, Delors could wield morality as a sword.
Delors saw European monetary union as a vital ingredient of the European single market, over whose birth he presided in 1993, with the crucial support of Margaret Thatcher, Britain’s quintessentially eurosceptical prime minister.
But he alienated policy-makers in Britain and elsewhere – and arguably helped spur the UK’s later European Union departure – by spelling out that the integrationist logic of the single currency would deeply constrain national decision-making.
Part of his credo was advocacy of a ‘social Europe’ that Thatcher and other free marketeers believed over-extended European regulation.
Schäuble, who held his Bundestag seat for 51 years, the longest span in German parliamentary history extending back to 1848, was finance minister from 2009-17. He finished his days as Europe’s most experienced politician.
He sparked criticism in southern Europe and, most potently, from the administration of President Barack Obama for his insistence on orthodoxy during the 2010-15 European sovereign debt upsets.
Yet, for all the dubiousness of the claim, he remained convinced to the end that he was right in urging the Greek government in 2011 to leave the euro for a multi-year ‘pause’ to allow policy space for reforms.
Schäuble role in healing rift with Gorbachev
German archives reveal Schäuble’s key role in 1988 as Kohl’s trusted chancellery minister, along with another veteran of the early Kohl era, Horst Teltschik, in healing a damaging public rift with Mikhail Gorbachev. This was caused by Kohl’s spectacularly thoughtless comparison of the Soviet leader with Josef Goebbels, the Nazi propaganda chief.
Without this diplomatic manoeuvring, German unification would not have become reality. When it did, Schäuble as Kohl’s interior minister engineered, negotiated and signed the 1990 unification treaty with the East German government.
Four years later, in 1994, with fellow Christian Democratic Union politician Karl Lamers, Schäuble co-authored a celebrated paper arguing for a flexible form of European integration around a ‘hard core’ centred on France and Germany. The concept has attracted many adherents over the years, seen most recently in a Franco-German expert document on the future of Europe in September. Yet it now appears an over-simplistic model to meet the current challenges.
Home-spun rectitude of the ‘Swabian housewife’
Schäuble, although from Baden, made a show of the home-spun financial rectitude of the classic ‘Swabian housewife’ (a phrase introduced by Chancellor Angela Merkel). Unusually for a German finance minister, he reaped impressive popularity in German public opinion.
Schäuble’s high domestic reputation was one of the factors persuading Christian Lindner, the current finance minister in the ill-starred three-party coalition of Chancellor Olaf Scholz, to take the post. The results have so far been disastrous tor Lindner’s Free Democratic liberal party. Lindner has achieved little credit for success and much blame for the coalition’s shortcomings. The FDP has lost ground heavily in regional elections and opinion surveys.
In 2009, marking the high point of Germany’s assumption of moral authority over the rest of the euro area, Schäuble and Merkel helped introduce into the German constitution a stipulation for a near-balanced annual budget – the notorious ‘debt brake’. Formal responsibility lay with Schäuble’s finance minister predecessor, Social Democrat Peer Steinbrück – but it bore Schäuble’s hallmark.
It seemed a good idea at the time.
The constitutional court in Karlsruhe, in a landmark November 2023 judgment, has now plunged Scholz’s government into disarray by ruling the three-party coalition had failed to honour this legal requirement. Schäuble died with the political, judicial and economic ramifications still far from resolved.
Men of sharp intellect and mordant humour
Delors and Schäuble were men of sharp intellect and mordant humour. Their conversation, in public and private, could be sardonic and withering. Yet both made convincing, often deeply emotional cases for policies furthering European understanding.
Part of Schäuble’s charm was that, in one-on-one meetings, he was often far more polite than expected to foreign government representatives. ‘How could I be rude to your prime minister?’ he once asked me.
Political circumstances and, in Schäuble’s case, a life-changing injury in a 1990 assassination attempt, prevented the two men on several occasions from holding their countries’ highest offices. But these factors reinforced their independence and penchant for plain speaking.
European Central Bank ‘should share the blame’
The Bundesbank’s website to this day sports Delors’ timeless bon mot from 1992: ‘Not all Germans believe in God, but they all believe in the Bundesbank.’ (This is placed next to a 1993 quote from Thatcher: ‘If I were German, I would definitely keep the Bundesbank and the D-Mark.’)
In 2012, Delors publicly stated that the European Central Bank should share the blame with wayward politicians from Europe’s periphery for allowing the build-up of the sovereign debt crisis through lax southern-state economic policies.
In 2016, Schäuble castigated Mario Draghi, the ECB president, for the central bank’s low interest rates and quantitative easing – blaming Draghi for 50% of the success of the newly-formed anti-euro Alternative for German (AfD) party.
As finance minister in Paris, although initially only No. 16 in Mitterrand’s governmental hierarchy, Delors was already stiffened by experience as a social policy adviser in 1969 to Jacques Chaban-Delmas, President Georges Pompidou’s war-hero prime minister.
In March 1983 Delors rescued Mitterrand’s presidency by introducing economic rigour into an administration rocked by three franc devaluations.
Passed over by Mitterrand for promotion to prime minister in 1984, he switched to the Commission with Kohl’s backing. This was part of a convoluted series of successful Franco-German compromises triggered by Mitterrand’s support for Kohl over early 1980s stationing of American nuclear missiles in West Germany.
Delors fear: ‘Otherwise I would have ended up being devoured by Mitterrand’
Mindful of the fickleness of Mitterrand’s persona, Delors went to extreme lengths to keep his distance from the president. ‘When I was brought into the government as finance minister, I wanted to remain separate from Mitterrand,’ he told me in 2007. ‘Otherwise I would have ended up being devoured by him.’
In December 1994, towards the end of Mitterrand’s 14-year tenure, Delors rejected a call from his Socialist party to run in the 1995 presidential elections. Opinion polls suggested at the time he would have won against right-wing Jacques Chirac, who became Mitterrand’s successor.
Before and during his fourth term in 1994-98, coinciding with fraught final steps towards introducing the euro in 1999, Kohl turned down the chance of making Schäuble his successor. Kohl seemed to believe that a chancellor paralysed from the waist down would lack the strength to complete the single currency.
This was the beginning of a final break between Kohl and his erstwhile lieutenant that left abiding wounds.
Kohl failed to grasp what became obvious to a later generation of international finance ministers: Schäuble’s intimidating intelligence, delivered from a wheelchair, gave him a formidable bonus in pathos, persuasiveness and power.
When Kohl predictably lost the 1998 general election to Gerhard Schröder from the Social Democratic Party, Schäuble became CDU party chairman. But in 2000 Schäuble gave up the position to Merkel (whom he had previously catapulted into the key post of CDU general secretary) following his embroilment in a party funding scandal.
Political manoeuvring aimed at making him German federal president in 2004, and again in 2022, came to nothing.
Schäuble’s skin-deep loyalty to Merkel
Schäuble served for 12 of Merkel’s 16 years of chancellorship as her interior and finance minister. Although he admired her intellect and respected her authority, his oft-protested loyalty to her was formalistic and skin-deep.
He pointedly refrained from endorsing her as one of Germany’s leading chancellors alongside Konrad Adenauer, Willy Brandt and Kohl. And he would habitually remind interlocutors of his scepticism over many of her policies, for example what he regarded as mistakes over immigration and excessive compliance towards Russia’s Vladimir Putin.
Schäuble’s record shows some similarities to that of Edward Heath, Britain’s pro-European Conservative prime minister in 1970-74, whose spell in parliament, like Schäuble’s, spanned 51 consecutive years. After two lost general elections, Heath in 1975 gave way as party leader to Thatcher. On the backbenches for the rest of his 26 years in the House of Commons, he showed ill-concealed disdain for his successor, indulging in what has been called in the UK ‘the longest sulk in modern politics’.
Schäuble did not sulk. He served in ministerial office under Merkel and reached the pinnacle as Bundestag president in 2017-21. But, in matters that counted, the final two decades of his parliamentary career gave him no shortage of opportunities for hinting at antipathy to the powerful woman who unseated him.
Time of disarray
The demise of Delors and Schäuble comes at a time of disarray. President Emmanual Macron, championing many Delorsian policies, looks becalmed only 18 months into his second term. The possibility of his replacement by far-right leader Marine Le Pen in the presidential election in 2027 is looming larger.
Schäuble’s legacy of the constitutional ‘debt brake’ appears an expensive mistake. It deprives Germany both of an important lever for revitalising creaking infrastructure and – in view of the international fall-out from the Karlsruhe judgment – of its sway over European economic policies.
Delors’ Socialist party has disappeared as a French political force. Schäuble’s CDU, now led by ally Friedrich Merz, is performing well in the polls. But the anti-euro AfD now gets higher support than any of the three parties in Scholz’s shaky coalition.
Many dangers, known and unforeseen, wait in the wings. Two intellectual titans leave the European stage with no one in charge.
David Marsh is Chairman of OMFIF.
This article was also published by the Atlantic Council.
For more, see ‘Ten Reflections on Jacques Delors’ by Charles Grant.