Olaf Scholz faces German tax fraud scandal. The political fallout could be serious

Olaf Scholz
Photo AFP

Germany's center-right opposition wants to raise the heat on Chancellor Olaf Scholz by launching a parliamentary investigation into his alleged connection to a massive tax evasion scandal, POLITICO writes.

The case — which dates back over five years to the time when Scholz was still mayor of the Hamburg city-state — is linked to the broader so-called “Cum Ex” affair, under which the German state was defrauded by over €30 billion as some banks, companies, or individuals claimed tax reimbursements from authorities for alleged costs that never occurred.

The Hamburg regional parliament plans to summon Scholz this spring — which will be for the third time — to an investigative committee looking into the scandal. And now the center-right CDU/CSU bloc also wants to set up an inquiry at the national level in the Bundestag.

The CDU/CSU group has enough votes in parliament to be able to set up an investigative committee. The Left party also said it would back such a request. Parliamentary investigative committees can hear witnesses and experts and request access to documents. Although the findings are summarized in a non-binding report, the political consequences, such as for upcoming elections, could be significant.

In a letter to the CDU/CSU parliamentary group seen by POLITICO, chairmen Friedrich Merz and Alexander Dobrindt said that the case should be investigated due to its “significant” importance for German national politics.

Although the chancellor has constantly denied having intervened, he has also given no answer on what was discussed during the private meetings. Instead, Scholz said on several occasions during the past two-and-a-half years that he cannot remember the content of the discussions.

“The chancellor would like to see… a line drawn under the clarification of this tax affair. But it is precisely the task of parliament to control the government, to look closely, especially with so many unanswered questions,” said CDU lawmaker Matthias Hauer.

Only 25% of Germans still consider Chancellor Olaf Scholz to be the leader. This was reported by the German magazine Stern, citing the results of a survey by the sociological company Forsa.

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