BERLIN, Aug 19 (Reuters) – A grilling by Hamburg lawmakers of German Chancellor Olaf Scholz over his handling of a multibillion-euro tax fraud when he served as the town’s mayor ended in a stalemate on Friday as Scholz denied any impropriety and opposition lawmakers accused him of obfuscating the reality.
Although the 3-1/2-hour listening to yielded no new insights into the “cum-ex” scandal, the actual fact the case is dragging on threatens to undermine the chancellor, who’s struggling to carry his fractious coalition collectively in the face of public discontent over hovering power prices.
In 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.
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The loophole, now closed, took on a political dimension in the northern port of Hamburg attributable to authorities’ sluggishness in 2016when Scholz was mayor in demanding reimbursement of tens of millions of euros gained underneath the scheme by native financial institution Warburg.
Warburg, which performs an enormous function in Germany’s second largest metropolis, finally paid its tax invoice of round 50 million euros ($50.3 million) after the federal finance ministry intervened.
“I did not exert any influence on the Warburg tax case,” Scholz stated on Friday throughout his second look in entrance of the Hamburg parliamentary committee of inquiry into the cum-ex affair, one of Germany’s greatest post-war company scandals.
“There is nowhere even the tiniest suggestion that I agreed anything,” he stated, referring to dozens of different testimonies earlier than the committee throughout 2-1/2 years of investigation.
Scholz once more insisted he couldn’t bear in mind the content material of the three conferences he had on the time with the Warburg chairman, including that he met with representatives of different banks, too, as mayor.
“The chancellor, in effect, refused today to participate in the investigation,” stated Richard Seelmaecker, consultant of the opposition conservatives on the committee, quipping that Scholz ought to endure hypnosis to restoration his misplaced reminiscences.
Seelmaecker stated Scholz could possibly be referred to as to testify earlier than lawmakers for a 3rd time as new findings from the investigation had been simply rising.
The chancellor’s recognition is lagging that of his financial system and overseas ministers, whereas simply 58% of Germans assume he’s doing an excellent job in comparison with a mean of round 70% for his predecessor, Angela Merkel, throughout her 16 years in workplace.
His Social Democratic Party (SPD) has slipped into third place in polls behind the opposition conservatives and junior coalition companions the Greens.
200,000 EUROS IN A SAFE
Finance Minister Christian Lindner, from the junior coalition occasion, the pro-business Free Democrats, which can also be lagging in polls, lent the chancellor his help on Friday.
“I have always understood Olaf Scholz to be a person of integrity, whether I was in the opposition or as now in government – and I have no reason to doubt that now,” Lindner advised the Rheinische Post newspaper.
Prominent Greens have stored quiet on the affair after criticising Scholz about it whereas in opposition.
Recent headlines that prosecutors probing the scheme in Hamburg found 200,000 euros in the secure of a neighborhood politician from Scholz’s ruling Social Democrats reignited suspicions of political intervention on the financial institution’s behalf.
Scholz has denied any data of the money or its origin and stated he now not has contact with the lawmaker concerned. The lawmaker didn’t reply to a request for remark.
“I harbour the hope that conjectures and insinuations may stop,” Scholz stated. “They lack any foundation.”
The chancellor had confronted Hamburg lawmakers final 12 months.
Gerhard Schick, director of watchdog Finance Watch Germany and a former Greens lawmaker in the federal Bundestag decrease home of parliament, stated he didn’t imagine in Scholz’s forgetfulness.
“I think that is pretence and it hurts his credibility,” he stated.
One of the prosecutors’ latest 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 suggests a targeted deletion (of emails),” Spiegel cited the report as saying.
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Reporting by Sarah Marsh and Andreas Rinke; Additional reporting by Hans Seidenstuecker and Jan Schwartz; enhancing by Andrew Cawthorne, Toby Chopra and Leslie Adler
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