Lockdown, relaxation, lockdown: how much longer, Mr. Scholz?

Finance minister and SPD chancellor candidate Olaf Scholz looks back on his Corona year for the podcast "The Zero Hour" – on mistakes, lessons, debts and ways out of the crisis. And he reveals what really annoys him about the demand for a corona long-term strategy.

Minister, an extreme, exhausting and nerve-wracking year is coming to an end. Unfortunately, the pandemic has not yet happened. Can you still switch off something over the holidays?

Olaf Scholz: I'm pretty confident about that. Despite all the challenges, I have always managed to find moments where I can relax. You also need that to concentrate at work. My wife and I usually flew somewhere over Christmas, sometimes Christmas under palm trees. This year we're staying in Hamburg. But we will still try to relax, read books, hike, jog.

Let's look back: in March, according to most economists, Germany reacted like a textbook, quickly and generously. "All arms on the table" – that was the central quote from you at the time. When did it become clear to you that you had to act like this?

I've been dealing with crisis management for a long time. In 2009, as Federal Minister for Labor and Social Affairs, I had to deal with a very severe economic crisis and at that time I developed the instrument of short-time working that many countries are now imitating. I am firmly convinced that you have to do business solidly so that you can counteract with full force in a crisis. That is why I was very much in favor of us being the first to launch our stabilization program and the economic stimulus program. And I worked to ensure that we in Europe find a common answer. Our economy is far too intertwined for us to be able to cope with the crisis on our own.

You know the saying "Afterwards you are always smarter". In your opinion, what was the biggest mistake in corona crisis management?

The biggest mistakes were made before the virus was a threat to all of us. For example the neglect of the public health system. It remains a problem that we do not pay enough the men and women who provide care services and do not give them sufficiently secure prospects. What also turned out to be a mistake is that we have not made such rapid progress with digitization. That, too, is something where too long sayings have been made.

Gigantic sums of money had to be decided very quickly. At the same time, you didn't know what was coming. Was there a moment when you were scared?

I am concerned about the health of citizens. I am not worried about the performance of our economy. I was hoping that our very strong fiscal response helped the economy recover faster than everyone thought. I couldn't know. It turned out better than previously calculated.

Many entrepreneurs and medium-sized companies still complain that help is on paper, but that it is too bureaucratic and time-consuming, that you fall through the cracks, that the big ones get help and the small ones not.

I take note of the discussion, that is always justified, it was never really in tune. The stabilization measures alone when the pandemic broke out were almost exclusively focused on small companies. A lot of experience has flowed into the process of launching Bridging Aid III now. We take a very specific look: How do we manage that the money reaches the people and that it is also tailored to all individual cases that we can understand. We want to give the economy the security signal that we have the strength to get through this. This is called perseverance in the language of the military.

This is reminiscent of ECB boss Mario Draghi, who coined the phrase "Whatever it takes" during the euro crisis. Would you say that too?

Yes. The quote had a major impact on stabilizing the euro. After it fell, there wasn't that much to do. It is right for the state to communicate that it has the strength and is ready to use it. This makes entrepreneurial investments and entrepreneurial courage possible.

This also gives rise to ideas such as the 75 percent reimbursement of sales that many restaurateurs cheer – and make economists shake their heads.

I still think this is the right decision. Everyone who signs up for it has filed a tax return for the previous year. We can hardly be deceived there. This is the most efficient and easiest thing you could do for such a time-limited measure specially tailored to a target group.

But you won't buy the New Year's Eve thugs that are not being sold for a three-digit million sum?

No. I could give you a longer lecture on how to understand the problem exactly. From this you can see that we do not make decisions based on gut instinct, but consider them carefully.

The first lockdown was tough and effective. The economy then came out of the crisis in the third quarter with the conjured "oomph". Now it looks like we've messed up the second wave. The "Lockdown Light" was expensive, unsuccessful, and now another recession is likely to come. Can we afford this crisis management until March?

We can hold out what is necessary. The plan is: observe the situation closely, then decide quickly and decisively. The decision in favor of the partial lockdown was made after careful discussion with many scientists who at the time, like everyone else, had hoped for a greater effect. He wasn't like that. That is why it is right not to hesitate and do more.

You talk about observing, then you decide. Where is the much-invoked long-term strategy that not only the opposition but also scientists such as Professor Hendrik Streeck are calling for?

The long-term strategy is not to confuse a natural disaster with chess. What we experience is like the eruption of Vesuvius. You have to act differently than to say: I have a long-term strategy, then it won't break out. That is not the case, it has broken out and the drama is there.

But if we already have FFP2 masks in May …

My criticism of this word long-term strategy is: It denounces a strategy that actually exists and that is also designed for the route, namely to observe the situation closely, to take quick, courageous decisions and, moreover, to initiate all the improvements that we discussed. Long-term strategy is a formula that the slackers always hide behind. The speaker of this word distracts from the fact that he doesn't have any himself.

When you look back and say that we could have made sure in May that old people's and nursing homes are equipped with FFP2 masks and that carers there are regularly tested, what is it about shirking? Even before the summer holidays, we could have ensured that there was a clear concept for hybrid teaching after the summer holidays. Is it really shirking to ask now: Can this really go on with lockdown-relaxation-lockdown-relaxation?

The shirking lies in the pseudo-logic of creating the illusion that we don't have to decide on a lockdown. They talk about things that are legitimate to talk about – the things you bring up – but pretend that we will be spared the hard decisions. No, they won't stay that way!

Corona shows us that in Germany a lot of state power emanates from permanent employees and civil servants. Self-employed, project-based or temporary employees – people who take economic risks – have fewer or no lobbies. Does Corona reduce the willingness to be entrepreneurial and self-employed?

No, entrepreneurship is essential for a dynamic economy. That is why I took great care to ensure that we specifically improve startup financing with the possibilities of state development banks. In January you will see that I am preparing a specific legislative proposal that will make it easier for startups to have their own employees become part of the ownership structure. Otherwise we made it possible for many to survive. We can see that in our tax data. Many of the tax deferrals that we made possible and the reliefs that we provided were no longer used at some point because everything has worked out reasonably well again. Not for all areas. It is therefore important that we stand by them for a long time. Like now, for example, with Bridging Aid II, so that the event industry has the courage to plan events again when things get better, although they won't pay off immediately.

It all costs money. Economists say we can afford this debt. But many people still worry about the high level of debt – in addition, buffers in the double-digit billions are being built in everywhere and the leeway is not being exhausted.

Right, we are unlikely to be running out of funds. For the current year I already know for sure, for the next we will see. After the Lehman crisis, we had a debt ratio of more than 80 percent. We will land at a good 70 percent at the end of the Corona crisis. Due to economic growth and the debt ratio, we were finally below 60 percent at the end of 2019 and have met all EU stability criteria. We will once again grow out of debt if we get our economy through the crisis now and we focus on advancing technology.

Are you going to tackle taxes too?

The question has to be separated. We can only reduce the debt ratio through growth. In any case, we have to honestly say that now is no time to give tax relief to those who are still doing well after this crisis – after billions of euros in taxpayer money have been used to secure and save companies. It is no secret that, as a social democrat, I think a more fair tax system is good. I believe that it would be right to relieve the burden on small and middle incomes and see whether those who earn a lot of money can make a contribution.

If you are not asking an SPD party conference, but the population, then your personal popularity ratings are very good. For the popularity of the SPD, on the other hand, the values ​​are stable and well below 20 percent. Do you believe in a Scholz bonus in the federal election in 2021, while the Union will not receive the Merkel bonus?


Which height?

Oh, nobody can say that. But I believe that the SPD will achieve a better result than in the current polls. We do not suffer from hubris, but we have a closed social democratic party and we made a very conscious decision very early on who should be the candidate for chancellor. Incidentally, the whole SPD thinks that how and which decision was made is good. We are using the long time we have due to the early nomination to ensure that we will arrive at the Chancellery in 2021.

Did this crisis actually weld the unloved grand coalition together?

Yes, you can already say that. We worked well together.

The year 2020 ends in which the word distance has a completely different meaning. Politics usually thrives on proximity, on marketplaces, on beer tents. Do you miss that?

Yes, that is missing. I feel like every artist. We don't want to exist in virtual space, we want direct contact. I spoke into a camera at the SPD debate camp and at one or two party congresses. That works too. But honestly you would like to see the people you are talking to and see their reaction, their eyes, how they look, how they sit, how they clap, or maybe they disagree. I hope I don't have to miss this for so long.

What are you still missing this year?

Many personal encounters. The opportunity to go out, to visit a restaurant or to attend a cultural event. All of this belongs in my life for me too and I hope that it will be possible again.

What are you looking forward to in the coming year? Besides the vaccine, what gives you hope for 2021?

The vaccine gives hope to all of us. And what gives me hope is that we will stick together as a country. That is the resource we need to build on.

Interview conducted by Horst von Buttlar and Tanit Koch. You can hear the entire interview on the podcast "Die hour zero". You can find all episodes directly at Audio Now, Apple or Spotify or via Google.


Leave a Reply