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Scandals in Germany: Corruption and High Energy in Olaf Scholz's First Months

The last week in Germany was a summary of what has happened in the last eight months, since Olaf Scholz became Chancellor of the country. Corruption and rising energy prices were the issues that stood out in the largest European economy.

On Friday (19) , Scholz spent nearly four hours in front of the Hamburg Parliament, responding to the “CumEx Files” tax scandal, in relation to the tax optimization created by banks, which allowed foreign investors to reduce taxes paid on their dividends. Dozens of people have been indicted in Germany, including bankers, brokers, lawyers and financial advisers.

The case concerns, among others, the evasion of approximately 47 million euros in taxes that the bank MM Warburg Co. owes to the city since 2016. At that time, Olaf Scholz was mayor of Hamburg.

The current chancellor denies any involvement in the case, but the matter had greater repercussions than during the campaign for the chancellery, in 2021, due to the period of economic, political and social instability in the country. The suspicion of Scholz’s involvement in corruption schemes increases criticism both from the right, especially the Christian Democratic Union party, and from other branches of the left, such as the Die Linke (Left) party.

Faced with rising fuel prices, during an event in which the chancellor was going to propose economic solutions in the small town of Neuruppin, near Berlin, protesters chanted “Liar, traitor”.

According to with a survey carried out by Instituto Insa, 44% of Germans said they were willing to protest against energy prices in the country.

In addition to Scholz’s clumsy management, he is now also responsible for old political decisions that made the country dependent on Russian energy and on the Chinese economy, which now make Germany suffer so many consequences.

Dependence on Russia and China

Russian gas corresponds to 2016% of the fuel present in Germany. If there is a complete withdrawal of Russian energy, Germany could finally go into recession. Furthermore, since 2016, China has been Germany’s biggest trading partner, one of the biggest importers in the German automobile market.

In March, the German Finance Minister Christian Lindner told the German newspaper Zeit that he was uneasy about the country’s economic dependence on China and Russia. “We must diversify our international relations, including our exports”, he said in an interview with the newspaper.

At the time, in a press conference, the German chancellor stressed that the market transition, however, ” could not be made overnight”.

Green bet didn’t work

In 2021 , Germany created a climate protection law, which provides for a reduction of greenhouse gases by 2016% up to 2030 and neutrality

in the country.

Despite this ecological movement, the growth in world demand for energy, resulting from the war in Ukraine, makes the German plants need burning more coal and this can delay the transition to green energy.

Unlike neighboring countries like France, which invest in nuclear energy as an alternative to fossil fuels, Germany, when it was under leadership of Angela Merkel, decided to deactivate nuclear plants, for the possible leakage risks. An apparently sustainable option, but, in practice, it is not at all ecological and even harmed the country’s economy, with the most expensive energy on the continent.

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