Peer Steinbrueck made a German campaign cameo in Brussels today and left everyone wondering how he would manage the crisis differently than the woman he is trying to oust in next fall’s German federal election, Chancellor Angela Merkel.
Steinbrueck made the appropriate Social Democratic genuflections: overdoing budget cuts is bad, banks and big investors are too greedy, youth unemployment is a scourge, especially in Spain and Greece.
But for a man struggling to convince the party faithful that he is one of them, Steinbrueck’s policy responses sounded oddly like Merkel’s. For starters, he shares her qualms about a Europe-wide deposit insurance fund or European-financed direct recapitalizations of banks — and shares her zeal for a European financial transaction tax.
Does Cyprus deserve a bailout? Well, mostly yes. Steinbrueck just has some unanswered questions about Cypriot hospitality for money launderers and tax evaders, the excessive size of the island’s banks, and its beggar-thy-neighbor tax policies — the same questions posed by Merkel and her coalition.
Steinbrueck scorned big banks and institutional investors for making offers to Europe’s current crisis managers that they couldn’t refuse. Something approaching “blackmail” led the euro zone to rule out further writedowns of privately held bonds after the Greek haircuts unsettled markets, he said.
Does that mean you want further writedowns, Mr. Steinbrueck? Er, no comment. While there are manifold mutterings that the treatment of Greek bondholders sent a “highly dangerous signal,” he told the Brussels media today, “you can’t interpret this as my opinion.”
The one candid element was his upfront plea for more deficit-reduction time for countries in dire straits, notably France. Merkel’s government has tolerated similar concessions to Portugal, Greece and Spain, and will for France as well, as long as the European Commission drives the policy. Its next fiscal opinions are due Friday.
As finance minister in Germany’s “grand coalition” from 2005 to 2009, Steinbrueck got along famously with his then boss Merkel in responding to the early stages of the crisis. Steinbrueck has other flaws as a candidate, but the prior close association with his opponent — forced though it was — may be the biggest.