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Germany's FDP look to fill Schaeuble's big shoes

By Noah Barkin

BERLIN (Reuters) - Wolfgang Schaeuble's decision to step aside as German finance minister has given the Free Democratic Party what it has long craved: the chance to shape policy from the most coveted perch in Chancellor Angela Merkel's next coalition government.

However the opportunity also presents the party with a conundrum. FDP leader Christian Lindner has signalled for months that he would prefer to lead the business-friendly party in parliament rather than take a cabinet job under Merkel.

If Lindner sticks to his stance then the FDP, which is returning to parliament after a four-year hiatus, must find someone else to fill one of the most important positions in international economic and financial policy. The person who replaces Schaeuble could also carry the prestigious title of vice chancellor.

The only party member besides Lindner with that kind of stature is Wolfgang Kubicki, whose political skills are unquestioned but who is also known as a loose cannon, a reputation that may not suit a sensitive job where a few ill-judged words can move global financial markets.

"If it is not Lindner, then there are not a lot of options," said one senior figure in the party. "Kubicki might be the only one with the profile and political weight."

The finance ministry seems to be the FDP's for the taking. As the second biggest party in what is expected to be a three-way coalition with Merkel's conservatives and the Greens, it would have first choice of cabinet post.

The post has become more influential over the past decade as Germany, the world's fourth largest economy, navigated the global financial crisis and euro zone turmoil.

Schaeuble, who is becoming president of the parliament, was known for his budget discipline and tough stance towards struggling euro partners like Greece. Whoever replaces him will play a crucial role in shaping Germany's response to calls from French President Emmanuel Macron for an ambitious overhaul of the EU and euro zone.

"The finance ministry will be absolutely crucial in the next government in shaping not just Germany's fiscal stance but the future of Europe," said Jens Boysen-Hogrefe of the Kiel Institute for the World Economy.


No one besides Lindner deserves more credit for the FDP's revival after its disastrous 2013 election result than the 65-year-old Kubicki, a quick-witted lawyer who sails around on his yacht "Liberty" and is known as one of the most outspoken, colourful figures in German politics.

Earlier this year, after Donald Trump announced his travel ban on seven mainly Muslim countries, Kubicki said Berlin should retaliate by barring the U.S. president from entering Germany.

He has made clear in the past that he is interested in the finance job. In a 2010 interview with newspaper Die Zeit, he said it was the only position that might lure him from his home in the port of Kiel in the northern state of Schleswig-Holstein.

"Only one post would interest me, finance minister," Kubicki said at the time. "Finance minister is the key job, and I would like to prove that budget consolidation can work."

Asked on Friday by German daily Handelsblatt whether he wanted the job, Kubicki dodged the question, saying policy was more important than cabinet posts.

But the interview with Die Zeit showed why the party, and Merkel, might have second thoughts.

Explaining why he hadn't yet made a move to Berlin, Kubicki told the paper that if he did, he could turn into a "drinker" and "possibly also a whoremonger". He then painted a hedonistic picture of political life in Berlin, replete with alcohol-soaked receptions and trysts with random women.

When asked about these comments today, Kubicki who is married to his third wife, says he has become "ethically and morally centred" in the intervening years.


The names of other FDP politicians are circulating as potential finance ministers.

They include Werner Hoyer, president of the European Investment Bank (EIB); Carl-Ludwig Thiele of the Bundesbank; Volker Wissing, the former head of the Bundestag finance committee; and Otto Fricke, former head of the budget committee. Two members of the European Parliament, Alexander Graf Lambsdorff and Michael Theurer, have also been mentioned.

One cannot completely rule out that Merkel's Christian Democrats (CDU) will keep the post. If they do, Peter Altmaier, who is expected to replace Schaeuble until the new government is formed, could be a favourite.

However, the scenario that several politicians in Berlin said was most likely is that Lindner will be compelled to take the finance ministry, with Kubicki sliding in as parliamentary leader, which is seen as a role more suited to his strengths.

Having Lindner, the face of the FDP, outside the government would be frowned upon by Merkel, who will be trying to hold together an unwieldy coalition with the FDP and Greens, a combination that has never been tried at the federal level.

There are big differences between the FDP and Greens on economic, environmental and European policy. Add in Merkel's Bavarian sister party, the Christian Social Union (CSU), which is pushing a hard line on immigration, and it is hard to see how the parties will bridge some policy gaps and hold together.

Regardless of who takes the job, big changes in fiscal policy are seen as unlikely. The FDP has called for 30 billion euros in tax cuts, but it is unlikely to get its way in the coalition talks and it remains committed to the "Schwarze Null" balanced budget that Schaeuble defended.

"You might see new impulses with an FDP finance minister," said Boysen-Hogrefe of the Kiel institute. "But don't count on big changes. The Schwarze Null will remain a priority."

(Reporting by Noah Barkin; Editing by Sonya Hepinstall)