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Ex-chancellor Schröder sues German Bundestag for removing perks

Former Chancellor Gerhard Schröder has sued the German parliament for removing some of his official post-retirement perks over his links to Russian energy giants, his lawyer said Friday.

Published: 12 August 2022 11:02 CEST

Former chancellor Gerhard Schröder (SPD), at a hearing of the Bundestag's Economics Committee on the Nord Stream 2 pipeline project in 2020. Photo: picture alliance/dpa | Kay Nietfeld

Schröder, 78, has come under heavy criticism for his proximity to Russian President Vladimir Putin and involvement with state-backed energy companies.

The decision to suspend Schröder’s taxpayer-funded office and staff in May was “contrary to the rule of law”, Michael Nagel, told public broadcaster NDR.

Schröder “heard of everything through the media”, Nagel said, noting that the Social Democrat had asked for a hearing before the budget committee responsible but was not given the chance to express himself.

Schröder’s lawyers filed the complaint with an administrative Berlin court, a spokesman for the court confirmed.

In its decision to strip him of the perks, the committee concluded that Schröder, who served as chancellor from 1998 to 2005, “no longer upholds the continuing obligations of his office”.

Most of Schröder’s office staff had already quit before the final ruling was made.

Despite resigning from the board of Russian oil company Rosneft and turning down a post on the supervisory board of gas giant Gazprom in May, Schröder has maintained close ties with the Kremlin.

The former chancellor met Putin in July, after which he said Moscow was ready for a “negotiated solution” to the war in Ukraine — comments branded as “disgusting” by Ukrainian President Volodymyr Zelensky.

Last week, the Social Democrats concluded that Schröder would be allowed to remain a member after he was found not have breached party rules over his ties to the Russian President.

Schröder’s stance on the war and solo diplomacy has made him an embarrassment to the SPD, which is also the party of current Chancellor Olaf Scholz.

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Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.