Olaf Scholz: Pressure grows on German chancellor over alleged tax scam ties

·2-min read
Olaf Scholz: Pressure grows on German chancellor over alleged tax scam ties

German Chancellor Olaf Scholz is facing growing pressure over his alleged links to a large-scale tax evasion scandal.

Germany’s main opposition CDU party has called on Scholz to explain his actions while he was mayor of Hamburg between 2011 and 2018.

Dozens of German bankers are being investigated in connection with so-called "Cum-ex" share transactions that are said to have cost the German state billions of euros.

The scheme by banks allowed foreign investors to quickly buy and sell shares around the dividend payment date so tax authorities can no longer identify the true owner.

Scholz has faced questions about meetings he had with the private bank M.M. Warburg in 2016 and 2017.

In 2016, Hamburg officials dropped their demands for the bank to repay €47 million in tax refunds that it had wrongly claimed for share trades.

Investigators are now looking into whether Scholz and other political leaders had pressured the city's tax office to waive the taxes.

Around €214,000 in cash was recently found in a safe that belonged to a close associate of the German chancellor. Local media also reported that Scholz's own emails had been examined as part of the "Cum-ex" investigation.

Scholz -- who previously served as Germany's finance minister from 2018 to 2021 -- has denied any wrongdoing and says he does not remember the meetings with Warburg.

Scholz is due to be questioned by a German parliamentary committee on Friday.

The 64-year-old is also facing criticism over Germany’s support for Ukraine, his government’s efforts to tackle inflation and a looming energy crisis, as well as the COVID-19 pandemic.

On Thursday, Scholz pledged that his government won’t leave citizens freezing or unable to pay their energy bills despite upcoming challenges.

“We will do everything to help citizens get through this difficult time,” he told reporters during his annual summer news conference in Berlin.