Peer Steinbrueck: A profile

19th January 2007, Comments 0 comments

Germany took over the rotating presidencies of the EU and the G8 in January. We profile the key players and the issues facing them in a series of reports.

He has presided over a cut in the budget deficit.

Peer Steinbrueck has been riding high as finance minister, having presided over a cut in Germany's budget deficit to bring it in line with the eurozone's strict fiscal target for the
first time since 2001.
The German deficit, which embarrassingly overshot the 3 percent limit of GDP for five years in a row, is expected to drop below the threshold this year as Europe's biggest economy emerges from a protracted period of stagnation.
Knocking Germany's public finances into shape was a central policy plank of the power-sharing government made up of Chancellor Angela Merkel's conservative Christian Democrats and the Social Democrats that was forged in November 2005.
A Social Democrat for more than 35 years, the 59-year-old Steinbrueck began his political career in the federal Ministry of Construction in 1974, before holding a series of posts in various state governments.
His breakthrough came in 2002, when he took charge of the governing Social Democrats in North Rhine-Westphalia, Germany's most populous state.
Three years later the Social Democrats were ousted from power and Steinbrueck moved to Berlin, where he quickly established his authority as finance minister.

A cold fish
*quote1*Married with three children, the outwardly jovial minister considers himself 'a cold fish.'
In the budget debate during the autumn he dismissed opposition demands that he hand back to employees some of the surplus the government had earned from better-than-expected tax revenues.

'I've got nothing to give away,' he retorted, saying the money was needed to help bring the nation's finances in order and slash new borrowing for 2007.
In February, Steinbrueck will play host to a meeting of G8 finance ministers and central bank chiefs in the city of Essen. One of the topics is likely top be greater transparency for hedge funds.

Germany would like greater control over the highly speculative funds in the interests of the international financial system, and has promised to make this a priority of its G8 presidency.
A tricky issue

*quote2*One of the tricky issues the minister will have to deal with during the EU presidency is a package of tax reforms, which Germany and Austria vetoed last month in a row over value-added tax.
The two countries want to overhaul their VAT systems in order to tackle a multi-billion-euro fraud in cross-border transactions, but the EU has refused to sanction the move, prompting the veto.
The row is expected to drag on and could be exacerbated when Germany increases its own value-added tax rate from 16 to 19 percent in January.
 But Germany has promised to give extra momentum to another plan, which could see countries operating across European borders using a common tax base within five years.
Germany is one of the main backers of the system, the goal of which is to establish a common basis for taxing corporate profits. Britain and Ireland oppose the move on the grounds it impinges on national tax sovereignty.


January 19, 2007

Copyright DPA with Expatica 2007

Subject: German, Germany, EU, G-8, Peer Steinbrueck

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