© Reuters. FILE PHOTO: German Chancellor Olaf Scholz attends a information convention with Palestinian President Mahmoud Abbas, in Berlin, Germany, August 16, 2022. REUTERS/Lisi Niesner/File Picture
By Sarah Marsh
BERLIN (Reuters) – German Chancellor Olaf Scholz is about to testify in entrance of lawmakers on Friday over his function as Hamburg mayor in tackling a multibillion-euro tax fraud in a case that threatens to tarnish him at the same time as he battles crises on a number of fronts.
Within the scheme of “cum-ex” or dividend stripping, banks and traders would swiftly commerce shares of firms round their dividend payout day, blurring inventory possession and permitting a number of events to falsely reclaim tax rebates on dividends.
The loophole, now closed, took on a political dimension within the northern port metropolis of Hamburg because of authorities’ sluggishness below the mayorship of Scholz at demanding reimbursement of hundreds of thousands of euros gained below the scheme by vital native financial institution Warburg.
Warburg, which performs a giant function in Germany’s second largest metropolis, ultimately paid its 50 million euro tax invoice after the federal finance ministry intervened.
The case threatens to undermine the chancellor at the same time as he’s attempting to carry his fractious coalition collectively within the face of rising public discontent over hovering vitality inflation within the wake of Russia’s invasion of Ukraine in late February.
“All of it stinks to excessive heaven and easily can not have occurred with out political affect,” Richard Seelmaecker, consultant of the opposition conservatives on the committee, informed broadcaster ntv.
Scholz, who has dismissed strategies of any impropriety in his dealing with of the affair, is because of face a Hamburg parliamentary committee of inquiry investigating the matter in a listening to on Friday from 1400 CET (1200 GMT).
“This has been a problem for 2 and a half years now,” Scholz lately informed reporters. “Numerous information have been studied, numerous individuals have been heard. The result’s all the time: There was no political affect.”
However current headlines that prosecutors probing the scheme in Hamburg found 200,000 euros within the protected of an area politician from Scholz’s ruling Social Democrats has reignited suspicions of political intervention on the financial institution’s behalf.
Scholz has denied any data of this money or its origin and mentioned he not has contact with the lawmaker concerned. The lawmaker didn’t reply to a request for remark.
The chancellor already confronted Hamburg lawmakers final 12 months and acknowledged then having a collection of conferences with the then chairman of Warburg however mentioned he could not recall particulars.
“He solely admits what might be confirmed,” mentioned Seelmaecker.
Certainly one of state prosecutors’ current findings is a discrepancy between the various calendar entries of Hamburg authorities mentioning the Warburg financial institution and “cum-ex” and the few emails on the subject, Der Spiegel journal wrote, citing the prosecutors report.
“This implies a focused deletion(of emails),” Spiegel cited the report as saying.
