Berlin If you like, the economists are somehow complete. Again and again the first names of the council members Veronika Grimm and Monika Schnitzer are switched. As a result, there are basically five of them, they joked in a meeting this week: the two economists mentioned, their alter egos, and the currently only male member, Achim Truger.
But the situation of the economists is actually too serious for jokes. The Council of Economic Experts, the most important economic advisory body in Germany, has been understaffed for a year and a half. After all, there were four of the five economists for a good year, and for three months now there have only been three.
For the remaining three scientists, it will be a great challenge to get their annual report in the fall. But it’s not just the quality of work that’s suffering, the reputation is also visibly battered. The former economist Peter Bofinger accused the federal government of “gross disregard for the Council of Experts”.
A president of one of the largest German economic institutes goes even further and now believes: “Politics seem to be destroying the Council.”
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At the end of March 2021, the disaster took its course. At the time, Lars Feld, who was chairman of the council at the time, resigned from the council of experts because the grand coalition was initially unable to agree on his replacement and then on his replacement. Last April, monetary policy expert Volker Wieland resigned from his position, primarily for personal reasons.
Wieland successor: Werding is not allowed so far
Since then, dissatisfaction has been growing among the remaining economists. Schnitzer speaks of an unpleasant situation: “If economic advice is important, then it is in the crisis.” Her colleague Truger adds: “The late appointment of the missing members makes our work this year quite complicated.”
There has been at least one designated sage for a long time. Three of the five members are appointed by the federal government, one member each is traditionally nominated by the trade unions and one by the employers.
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After Wieland’s resignation, the employers had suggested the economist Martin Werding. Everyone agrees with Werding, the Bochum scientist is considered to be professionally and personally suitable, according to government circles.
“I’d actually like to get started since May, there’s enough to discuss,” says Martin Werding.
(Photo: imago images/Jürgen Heinrich)
All that is missing is the formal appointment by the federal cabinet. And for almost two months. Werding waits and waits, but nothing happens. “I’d actually like to get started since May, there’s enough to discuss,” he says to the Handelsblatt.
The reason for the delay: The Federal Ministry of Economics wants to fill both vacant posts at the same time. The officials of Economics Minister Robert Habeck (Greens) thought they would quickly find a candidate for the other open post. As early as May, it was also heard from government circles that there was a fundamental agreement on specific candidates between the finance and economics ministries and the Federal Chancellery.
So the traffic light agreed to look for a candidate who does not belong to any political camp. “We don’t want to carry the personal slurs that the economists delivered to each other on Twitter to the Council of Economic Experts,” says a government representative. The Council should not be politically charged any further.
An appointment based on party political logic was no longer an option, which is why the SPD’s preferred candidate, Jens Südekum from Düsseldorf, was finally out of the running. The FDP had already excluded him during the coalition negotiations.
Double burden for the economists
While Südekum was ready, many other candidates that the federal government subsequently approached declined. “There have never been so many rebuffs among the economic experts, the extent of the cancellations is historic,” says the government environment.
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The reason for this is said to be the high workload. On the other hand, according to economists, many scientists apparently do not want to expose themselves to the political games being played with the Council.
The Feld case had thrown a bad light on the council. At that time, the SPD had used all means to block an extension of the expert on state finances, and the Union, in turn, rejected all SPD candidates. “And after the fierce economic debate about a gas embargo, one or the other will certainly have even more reluctance to go public like this,” admits a government representative.
Field successor: First nobody was found, now negotiations are taking place with Malmendier
In order to find politically neutral candidates, the federal government kept a lookout for suitable candidates, especially women, abroad. According to Handelsblatt information, the federal government is currently negotiating with Ulrike Malmendier, who teaches at the US University of Berkeley.
The German with her focus on behavioral economics and monetary policy would fill an important gap in the Council. It was proposed by the Federal Chancellery.
According to Handelsblatt information, the federal government is currently negotiating with the economist who teaches at the US University of Berkeley.
(Photo: Berkeley)
Now the rest of the federal government is checking whether there is any SPD proximity to Malmendier, which some in the ministries fear with a view to their research. Government representatives and those around the German Council of Economic Experts are also wondering whether the job as an economic method is compatible with living in the USA.
The committee holds a regular working session once a month. Every autumn, the economic experts lock themselves up in Wiesbaden for weeks to prepare their annual report, plus special reports.
It is hoped that a solution will be found very quickly, according to government circles. But if the search drags on, one must consider at least appointing Werding quickly, a government representative now believes. This would be possible, cabinet meetings will continue to take place during the summer break.
In fact, the government is already too late. “In the current composition, each of us has to take care of almost twice as many topics as usual when preparing the annual report,” criticizes Council member Schnitzer.
And even if a new sage or even two should join shortly, that doesn’t just make it easier. The first version of the report, which is hundreds of pages long, is already available. “If there are new appointments in the fall,” says Truger, “we’ll have to discuss all the issues from the beginning with the new members.”
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