Merkel's Migraine The Man Who Wants Greece to Give Up the Euro
A member of Angela Merkel's junior coalition party is becoming a liability for the chancellor. As she tries to push through Greek bailout measures, Free Democrat Frank Schäffler is working to foment resistance. All he needs is 20 votes in parliament to block the next aid measures for Athens and the euro.
A make-up artist dabs a bit of powder in his chubby face, then allows politician Frank Schäffler to fall into a deep leather sofa. In just a few moments, the evening talk show he is appearing on will be recorded. Snacks dry out on silver platters as other guests chatter excitedly, but Schäffler remains focused. He's come to say one sentence. His sentence.
So, Mr. Schäffler, the presenter soon asks, would it be best if Greece were to leave the euro-zone?
"If Greece were to do that itself, then I would recommend it," he says.
The sentence is a bit indirect, but its content is Schäffler's show-piece. Greece should return to the drachma, the member of parliament with Germany's pro-business Free Democratic Party (FDP) believes. It's a provocative message that hardly even a dozen German parliamentarians have allowed to cross their lips -- and one that is making the former insurance broker a potential serious risk for Chancellor Angela Merkel's government. Should the chancellor fail to achieve a majority in parliament for such a fundamental question as saving the euro, her center-right coalition government could collapse.
While other politicians staunchly defend another Greek bailout worth billions, one can count on Schäffler taking the extreme opposite position. From inside the government camp, he encourages the Greeks to either sell their beloved islands, famous the world over as vacation destinations, to raise cash or to leave the monetary union. The vote in parliament that only just approved a negotiating mandate for a new bailout is still fresh, but the member of the FDP, Merkel's junior coalition partners, is already threatening the chancellor with another embarrassment.
When the Bundestag votes on the next multibillion-euro tranche of loans for Greece and the future European Financial Stabilization Mechanism (EFSM) -- the 700 billion, permanent euro rescue fund, into which Germany will transfer actual cash for the first time instead of just guarantees -- Schäffler wants to vote against the measures and convince others to do the same.
No Forum Too Small
To spread his message, he traveled some four hours away from his electoral district in eastern Westphalia, in the state of North Rhine-Westphalia, to appear on the talk show in Berlin in mid-June. Some 140,000 people watched his appearance, a market share of about a half-percent. Still, no forum is too small for his mission, Schäffler says.
He has neither charisma nor a good network. Schäffler is a politician with only one issue -- the euro. He gets his strength from the targeted breach of a taboo, doing something that the German political system isn't designed for. He's sticking to his opinion regardless of whether it runs counter to his party's euro-friendly tradition or trips up the coalition government he is part of. Meanwhile, the majority of Germans back his views. Up to 60 percent of the country's people reject plans for a second bailout for Greece, while a number of economists have been encouraging speedy debt restructuring.
"Mr. Schäffler, I'd like to thank you heartily for your straightforwardness," a member of the audience says in the windowless lecture hall at the University of Marburg at the end of June. He's been invited by the FDP student group, and around 180 people are present -- a success. Schäffler paints a picture of a currency in downfall. The governments break laws amongst themselves to provide aid for each other, while the central bank becomes a dumping ground for unprofitable securities, and politicians devalue the euro just like the medieval counterfeiters of gold and silver coins. Instead of posing a question, an audience member thanks Schäffler, while others rap their knuckles on the desks in approval. The meeting takes on a festive tone.
Schäffler smiles sheepishly. His cheeks are red, and behind his thin wire-framed glasses his eyes dart back and forth. He is 42-years-old with slightly graying hair, but he looks like a student at his final high school exam.
The former back-bencher is still getting a feel for his new role as a resistance fighter. Initially he was driven by the worry that the billions in bailout payments would bury Germany's future. "When 80 million people holding life insurance contracts are all afraid of inflation, it affects the substance of democracy," he says, having loosened up from all the attention. "People tell me to found my own party," he says. "I tell them that's a thousand times harder than changing the FDP from the inside out."
As the bad news about the euro multiplies, Schäffler's position wins new supporters. When he voted against the first bailout package in parliament more than a year ago, he was the only member of the FDP to do so. Not long after, when the European Financial Stability Facility (EFSF) came up, he had two sympathizers in his party's parliamentary group. The motion with which he tried to unite the FDP in rage over the euro had 173 supporters at the party convention. "With each rescue package two or three new dissenters emerge," he says.
The break away from the party line has also paid off for Schäffler personally -- it has become a career accelerator. At the last party conference he climbed the ranks to become part of the FDP's national executive committee. He was also voted district leader for the party by members in the Ostwestfalen-Lippe district.
On a Monday evening in June, Schäffler is a guest in Bern, Switzerland, where he is giving a talk on the euro. Speaking under the chandeliers and gilded ceiling of a five-star hotel, he quotes the Russian revolutionary Lenin: "The surest way to destroy the capitalist system is to debauch its currency." Here Schäffler is hailed as a "brave fighter," a rebel against the mainstream supporting the euro bailouts. His audience is full of parliamentarians, bankers and fans of the theories of Friedrich August von Hayek.
The Nobel Prize-winning economist wanted to do away with the money monopoly of the state. According to Hayek's idea, if companies and private people are allowed to introduce their own currencies, the best one will win out in the end. Schäffler is a fan of this concept, and it is the foundation of his euro criticism. The euro, he believes, would have not stand a chance against such a competition, because the common currency is bad money. "The cheap money of the central banks creates a fake prosperity without a real basis," he says in Bern.
In the German parliament such theories only end in head-shaking, for example from fellow FDP member and freshly appointed deputy parliamentary group leader Volker Wissing. He belongs to a sober-minded species of financial policymakers, and there's not a single personal item in his office. He and Schäffler are about the same age, but they have little in common.
In fact, Wissing is his opponent in the FDP. Instead of making appearances on talk shows, he attempts to change the party's position through committees. Schäffler, by contrast, stepped down from his position as the leading FDP member on the German parliament's Finance Committee in protest over the first Greek bailout package.
Whereas Wissing searches for practicable solutions, Schäffler suggests extreme measures without regard for the fact that politics are defined by negotiations and compromises. Schäffler demands a radical debt haircut, while Wissing considers how this suggestion would fail when faced by the resistance of the European Central Bank.
Schäffler also wants to make payments to the planned ESM bailout subject to approval by the entire parliament. Wissing believes this time-consuming process is a fantasy in light of the speed with which financial markets operate. "When it comes to saving the euro, throwing suggestions out there that haven't been thought through is grossly negligent," Wissing says.
But of Wissing, Schäffler says this: "I couldn't do that -- defending the party line against my better judgement."
Wissing sometimes even gets phone calls from Chancellor Merkel, but Schäffler doesn't even get called by his own FDP party leader, Philipp Rösler.
Merkel's Majority At Risk
It may not be wise, but Schäffler's rebellion is having an effect. Suddenly Merkel and Finance Minister Wolfgang Schäuble are expressing support for debt rescheduling, however weak it may be. Schäffler takes credit for their about-face. "A parliamentarian can only change the big picture by approaching it head-on," he says.
Meanwhile, the anti-euro camp in parliament has formed a close fellowship, even holding their own meetings, including one last Tuesday. After a parliamentary group meeting a number of members of parliament from Merkel's Christian Democrats and the FDP held a meeting. They had already met with Lüder Gerken, a euro-critic from Freiburg, for professional advice. Now it was law professor Hanno Kube's turn. Playing host were Schäffler and his CDU colleague Klaus-Peter Willsch. Altogether 25 parliamentarians attended. If 20 of them vote against the Greek bailout or the European Stability Mechanism, Merkel will find herself lacking the majority she needs.
But is Schäffler truly ready to risk destroying the Christian Democrat-FDP coalition, and the political survival of the Free Democrats along with it, just to reinforce his criticism of the euro?
He leaves no doubt just before beginning his talk in Marburg. "Yes," he says tersely. "This is getting serious."