Is Germany having separate ministry for finance and economics, good strategy?

As far as I know Germany is the only country that has separate ministries for finance and economics. Described as ordoliberal tradition, this theme has been in practice since the founding of Federal Republic in 1949. Is this bifurcation an effective strategy in today’s geoeconomics power play?

As a German school of economic thought ordoliberal tradition is expected to ensure free market by promoting competition and preventing monopolies with a focus towards social market economy avoiding concentration of finance and economics power within a coterie of people and enhancing distribution of wealth across various social groups.

Let me look at the ministry of finance. The present incumbent is Lars Klinbell of the SPD who overseas fiscal and monetary policy, budgeting, taxes & debt, money–flow and the financial markets. Put it in other words earning & spending.

On the other hand ministry of economic affairs which is headed by Ms. Katherina Reiche from the CDU looks after economic development, industrial & market policy, trade & innovation, competitiveness, energy, climate and other assortments. The underlying current is growth & development.

Participating in international forum requires the presence of both ministers who hail from different political parties whose vision & mission differs substantially.

The strategy of separating power in terms of different ministry for finance and economics has been at odds with the consensus opinion held throughout by the globe. May be this is a German innovation! But today Germany is in freefall in both theatres. German Exports to America is down 7.8%. If not for the Euro as a common currency, assuming previous Deutschemark being legal tender in Germany today, it would have fallen terribly in the financial market!

Now let me turn to USA.  Instead of ministers America has Secretaries. Scott Bessent the current Treasury Secretary handles both finance and economics. Howard Lutnick is secretary of Trade. The state Department has an Under-secretary for economic affairs. The present holder, Jacob Helberg in addition to his main task supervises foreign economic policy related to growth, energy & technology.

The derivation is clear finance portfolio encompasses both finance and economics whereas the trade & commerce is the forte of different ministry.

In order to craft a winning strategy amid geoeconomics, the German Cabinet must immediately look into the matter of combining finance and economics under one roof!

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

 

Why Gerhard Schroeder is the man of the hour?

Ending hardliner Helmet Kohl’s longest grip in German politics, Gerhard Schroeder led the SPD coalition to victory in the 1998 election. Overnight, he was hailed as the catalyst destined to change the fabric of Federal Germany. That he did with characteristic elegance. Then and now he is the man of the hour!

Immediately after being sworn in as the Chancellor, Gerhard Schroeder set in motion a phenomenal transformation, from conservative capitalism to liberal welfarism. His rule lasting seven years as the head of Centre Right Coalition was noteworthy in that he immaculately balanced diverge opinion of the constituent parties to focus on the Agenda 2000 alternatively known as the “Courage to Change”. Here are few highlights:

Reform was the crucial goal that underpinned his presidency. Firstly, it was to cut the cost of unwanted labour and at the same time utilizing the excess labour elsewhere in productive enterprises. Initially he cut and trimmed labour wages but at the end he enhanced these as productivity gains poured in. Integrating labour from the former East Germany was a Herculean task which he performed with excellence. His mantra: social welfare system must go hand in hand with geoeconomics pragmatism.

He was pacifist to the core. Along with French President Jacques Chirac, he opposed the American war in Iraq in 2003. By the same token he laid the foundation stone for German-Russian bon-homie. Back in the region, he sought to spread the benefits of the European economic success to others who have not joined the EU.

Schroeder in German means a tailor. He succeeded in stitching the Coat of German-Russian cooperation blending pro-German patriotism with Russia friendly pragmatism. Energy partnership with Russia was the lasting impression he left with the inauguration of Nord Stream pipeline. As a brilliant stroke in strategy amid geoeconomics he played a role of a viable intermediary between USA and Russia despite being dubbed as “Putin’s Man in Berlin”.

Ignoring heavy criticism as pro-Russian agent, Gerhard brought  economic miracle where cheap Russian gas was leveraged multiple times to bring in efficiency  in German manufacturing, technology, motor industry and not to forget the pharma segment.

Laudable achievement in economy apart, Gerhard laid the seed for multi-polarity, a concept that is in the lips of many geoeconomics analysts today. He enhanced diplomatic relationship with many countries promoting trade, finance and investment to and fro. Not only that, all the seeds  he planted during his tenure as Chancellor started to grow and bore the gains during his seven year tenure and later were transferred to his successor Angela Merkel whose 16 years at the helm made Germany a great European power to be reckoned along with USA, Russia and China.

Politician, Tailor, planter, statesman and master in geoeconomics, Gerhard Schroeder is the man of the hour Germany needs today in order to get out of the economic morass she is in. More than anything else, Germany has to get out from the vassalage of being an American Colony!

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

 

 

 

Why Olaf Scholz failed over Russian energy policy?

Greetings for the New Year 2026

At one point the then Chancellor of Federal Germany, Olaf Scholz was in strategic defiance against America led west when he signed up with Russia a comprehensive natural gas agreement in March 2022. But within months he failed. Why?

First and foremost NATO was too strong for him to fight alone. Jen Stoltenberg the then NATO Secretary General urged Olaf Scholz to walk back on the agreement lest Germany would be blamed for disrupting NATO unity. He urged the Chancellor to find alternate supply routes for Russian energy that are anyway going to be too costly.

Even though Scholz was explaining to NATO that Germany needs Russian energy much more than Russia needs German cash and joining in any sanctions regime targeting Russian energy would backfire. Moreover, finding alternate paths say from Central Asia would take quite some time to materialize. None of these pleas were acceptable to NATO Secretariat or to the White House under Biden Administration.

Unlike in the case of strong willed Gerard Schroeder former Chancellor and mentor to Scholz at Social Democratic Party (SPD), Scholz was too weak for a frontal fight against the NATO. He therefore reluctantly gave in to the arm twisting. Within few months Russian energy supply was dissipating on one hand. On the other German industrial output plunged 23% due mainly to the sky rocketing energy cost that hiked to almost 340%.

Olaf Scholz was having running duel with his defence minister Boris Pistorius, who became the most popular politician across the country and a top brass of the SPD at the expense of Scholz who was often considered too weak to mount any opposition to what Pistorius says in public as regards to the cabinet stand on Russian energy policy.

Scholz, was found as a compromise candidate for Chancellorship in the SPD coalition with the Greens and the liberal FDP. He often faced barrage of criticism over his weak handling of international relations with both Russia and America. As a peace lover he was perceived a coward due to his reluctance to get involved in the supply of heavy armour to Ukraine which he rightly perceived as impediment to balanced relationship with Vladimir Putin.

Russia is enemy to Germany narrative was intensively propagated by the Globo Capitalists who had a bigger say in German politics. Even though the electorates per se do not buy into it, especially in regions of the former East Germany, contrary opinion was either muted deliberately or treated as anti-German utterings. Hence, Scholz getting beholden to Putin was vociferously shunned.

More than anything else, his Foreign Minister Ms. Annalena Baerbock representing the Green Party was too vocal in her anti-Russian rhetoric  who at one point declared  that “Germany is at war with Russia” in the European Parliament. She along with Pistorius were actively pursuing anti-Scholz propaganda contrary to the principle of cohesiveness over of cabinet policy.

Lastly when his party SPD suffered a crushing defeat in a key regional election losing to the conservative CDU especially in its worst-ever result in Germany's most populous state of North Rhine-Westphalia the writing was on the wall that his days are numbered.

Sans a workable strategy to offset economic downswing of Germany resulting out of Ukraine war and energy war Scholz has no other choice but to continue as a lack-lustre Chancellor. His original strategic defiance against America led west failed miserably.

Lesson to be learned from Olaf Scholz saga is simple. You must understand how to navigate your strategy amid geoeconomics, if you wish to succeed in business or government!

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser