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Social-democratic co-leader Lars Klingbeil will become the next German finance minister, leaving him the strings of the Stock Exchange of the largest European nation when she is preparing to release hundreds of billions of euros to revise her infrastructure and armed forces.
Klingbeil’s powerful role in the next government, which will also be combined with the position of Vice-Chancellor, was confirmed on Wednesday when his party announced that its members had approved a coalition agreement with the Christian Democrats of the Center-Droit (CDU).
This opens the way to the election of the chief of the CDU Friedrich Merz as the next Chancellor of the country by the German Parliament next week.
Klingbeil, 47, led the Social Democrats (SPD) to their worst result since 1887 in the national elections in February, when his party finished third with 16% in the middle of the anger of the voters in front of the previous government led by the SPD led by Chancellor Olaf Scholz.
But Klingbeil, a career politician who acquired a reputation as a clever political operator, managed to divert responsibility for the result and led the party’s coalition negotiations with the CDU.
It was seen within the SPD as having skillfully sailing these talks, guaranteeing a fund of 500 billion euros to invest in the neglected infrastructure of Germany in exchange for the acceptance of loosening the country’s strict borrowing rules to allow unlimited defense expenses.
He and the Co-Leader SPD, Saskia Eskin, obtained seven ministries for their party, against 10 for the CDU and his Bavarian sister party, and obtained support for their campaign promises, including tax reductions for lower wages, protections for pensions and provisional engagement in a minimum wage of € 15.
Although the SPD young wing has committed to rejecting the agreement, increasing objections to elements, including its more difficult position on migration, the basis of the party approved the agreement by almost 85%. It will be signed on Merz on Monday as a chancellor who will take place the next day.
Klingbeil’s most urgent task will be to write a budget for 2025 to replace the provisional that adopted as an extension after the premature collapse of the last government, as well as a budget for 2026.
He will resume the reins of the Ministry of the former Banker Goldman Sachs Jörg Kukies, and will have to develop a plan to spend the 300 billion euros in the 500 billion euros infrastructure fund which is allocated to expenses at the federal level.
The fund is a central board of the next government plans to revive the stagné economy, which suffers from the most prolonged crisis in its post-war history.
Klingbeil, the son of a Bundeswehr soldier, has no training in finance or economics. He studied political science at university and, since his entry for the first time in Parliament at the age of 27, has gravity to foreign policy.
But he had to compensate for his lack of expertise by surrounding himself with a solid team, said Jens Südekum, professor of international economy at Heinrich Heine de Düsseldorf University who acted as an informal advisor to Klingbeil.
While Klingbeil was “obviously not a type of schäuble” – a reference to the famous Minister of Finance of the CDU Hawkish of Germany, Wolfgang Schäuble, who died in 2023 – Südekum said that it would be more careful than certain observers could not expect.
“He likes to be considered the adult in the room. The guy ensures that the federal government acts responsible for a manner,” said Südekum.
Klingbeil has established a solid working relationship with Merz, the two men agree last month to contact the use of the informal German “German”.
Marion Mühlberger, economist and political analyst at Deutsche Bank Research, said the markets would be focused on “the speed with which the new government establishes the budget” and if it can spend before the summer holidays.
The SPD said the rest of its choices for the cabinet would be announced on Monday.
