Editor’s Note: Nina dos Santos is a London-based news anchor and correspondent. She is the host of CNN International’s twice-daily global business show World Business Today. Follow her on Twitter.
Story highlights
CNN's Nina dos Santos sat down for a rare interview with German finance minister Wolfgang Schaeuble
She asked him if he foresaw any more bailouts, and he said "I don't see" any
Schaeuble said the "problems are not solved but we are in a much better shape than we used to be some years ago"
Arriving for our interview in Berlin this week, Wolfgang Schaeuble seemed eager to be back on the campaign trail.
Fresh from his summer break on the North Sea island of Sylt, the German finance minister effortlessly slipped back into what has now become a familiar routine: fielding questions about the eurozone
When asked if he foresaw any more bailouts, Schaeuble said “No, no I don’t see, the problems are not solved but we are in a much better shape than we used to be some years ago.” He pointed to the falling costs of sovereign debt and lower budget deficits across the common currency bloc and ruled out any more haircuts on outstanding government debt.
With Germany heading towards elections on September 22, Chancellor Angela Merkel is enjoying unprecedented popularity. Her approval rating is 63% – more than double that of her nearest rival, former finance minister and now SPD leader Peer Steinbrueck.
The chances of a non-Merkel win may be slim.
Read more: Full coverage of euro crisis
However, as per Germany’s political tradition, whoever emerges victorious will have to form a coalition with one of the other parties, thus clouding the policy outlook for those on the outside looking in.
“I hope we will win,” Schaeuble told me, then adding: “We have to fight [but] I think the general mood is in favor of us.”
Germany’s government is in a curious position of having to serve two constituencies: one it’s elected for and another over which it has no formal mandate but a lot of financial sway.
As the dominant economy in Europe, Germany has been pivotal in helping to fund and direct troubled member states but its leader has to balance that with her nation’s reluctance to be viewed as the rich relative.
Read more: Recession over but don’t celebrate yet
In this Schaeuble is steadfast: “If Chancellor Merkel [is] re-elected I am confident that we will continue to work for a stronger Europe – that’s our general position,” he said. “We don’t want a German Europe but we want a strong Europe and that means every member state including Germany has to increase its competitiveness.”
That, he said was about each country doing its duty and ensuring it did “not to ask for more money by others – that’s the wrong way to get a strong Europe, that’s the wrong incentive.”
Since Greece was granted its first bailout in 2010 troubled eurozone countries have been granted around 440 billion euros in financial assistance. The cash has been funnelled through the International Monetary Fund, the European Central Bank and the European Union in exchange for promises to rein in spending and debt.
Germany, which has the deepest pockets, is on the hook for the lion’s share of the support – and as election fever sets in, so has bailout fatigue.
Watch more: Sorrell: Why we need strong leadership
Schaeuble reopened old wounds this month by saying Greece would need a third aid program, though when asked by CNN he wouldn’t be drawn on the size of the offer, saying it was too early to speculate. However, Greece’s Finance Minister Yannis Stournaras said the country could be looking for an extra 10 billion euros in aid. It’s a figure close to the 11 billion euro shortfall already identified by the IMF, whose 3-year program is set to end next year.
As part of a multi-pronged approach to contain the eurozone’s existential crisis, leaders have tried to shore up its financial sector by creating a banking union as well as a contingency fund for countries in distress.
Read more: Greece may need another 10 billion euros
When combined with the ECB’s commitment to “do what it takes” to protect confidence in the single currency, such actions may have averted the worst for now. But Schaeuble is under no illusions that without coordinated budgets for the country’s using the single currency, the euro will always be vulnerable.
I asked him if the move toward closer fiscal cooperation has left the eurozone more politically divided than it has been in its recent history. Schaeuble told me problems arose if there not a solid fiscal framework, saying the bloc has “made a lot of progress ..to get better conditions, better rules for common fiscal policy.”
One thing Schaeuble cannot deny is the benefits to the country’s legendary export machine from the weaker currency. Thanks to its flailing adherents, the euro has been less strong than a deutsche mark would have been. However, Schaeuble also pointed to the lower interest rates enjoyed by the countries in Southern Europe.
Read more: Tiny nation bucking eurozone’s problems
Schaeuble’s euro-speak is as fluent and comes from one who has both experience and economic clout. Yet up until now it’s a language that hasn’t dominated Germany’s campaign literature, which has instead been focused on issues like creating jobs, wages and the housing market.
Of course the great irony is that while Germany may be looking inwards this election, the world is keeping its eyes peeled for its next move. Just ask Germany’s neighbors. They have relied on her in times of crisis, and they will also look to her for the path to recovery.
