Theodor Waigel (born 22 April 1939) is a German politician of the Christian Social Union in Bavaria (CSU). He represented Neu-Ulm in the Bundestag from 1976 to 2002.
Waigel is a lawyer, and earned a doctorate in 1967. He was a member of the Bundestag from 1972 to 2002. He served as Federal Minister of Finance of Germany in the Cabinet of Chancellor Helmut Kohl from 1989 to 1998, and as Chairman of the Christian Social Union in Bavaria from 1988 to 1999. He is known as the father of the Euro, the European currency. He played a vital role in its introduction as German Minister of Finance. He also managed to impose an austerity program on West Germans and overcome the massive deficits of German unification to meet the strict fiscal benchmarks mandated by Europe's single currency. In 2009, he was appointed Honorary Chairman of the CSU.
Waigel was born in Ursberg to a farming family originally from the Swabian village of Oberrohr. When he was six years old, his older brother, August, was killed in France during World War II.
Member of the Bundestag (1972–2002)
Waigel first became a Member of the German Bundestag for Neu-Ulm in the 1972 federal elections. From 1980 to 1982, he served as spokesperson of the CDU/CSU parliamentary group on economic affairs. He was the group's deputy chairman from 1982 until 1989. In this capacity, he also served as the leader of the Bundestag group of CSU parliamentarians.
Federal Minister of Finance (1989–1998)
In a 1989 cabinet reshuffle, Chancellor Helmut Kohl named Waigel as new Federal Minister of Finance, replacing Gerhard Stoltenberg. During his time in office, his state secretaries included leading economists Horst Köhler (1990–1993) and Jürgen Stark (1995–1998), among others.
During his time in office, Waigel oversaw the early economic integration of East Germany after the fall of Communism. He not only had to impose enormous new taxes on the German public, but he also had to keep the country's budget deficit from ballooning while Germany was spending $150 billion a year to rebuild the east.
In March 1990, Waigel publicly announced that the government was considering a proposal by its central bank, the Bundesbank, for conversion at a rate of one Deutsche mark to every two East marks, with an exception for a small portion of personal savings. In response, hundreds of thousands of East Germans protested against the plan, including about 10,000 in East Berlin, who took to the Palace of the Republic, where the newly elected Parliament was holding its inaugural meeting. Chancellor Helmut Kohl said that was not the policy after all.
On 19 May 1990, Waigel and his East German counterpart Walter Romberg signed a state treaty to merge their economies and make the West German mark the sole legal currency in both nations by 2 July 1990.
In July 1990, Waigel joined Kohl and Foreign Minister Hans-Dietrich Genscher on a trip to Moscow to meet President Mikhail S. Gorbachev, where they worked to convince the Soviet leader to drop his remaining objections to German unification within NATO.
On 9 August 1990, Waigel announced that West Germany's 1990 budget would be its last and that he was withdrawing the Cabinet draft for the 1991 budget to make way for an all-German budget consonant with unification. Later that year, he said that borrowing by government, state and local authorities would total up to $95 billion the following year, nearly five times the equivalent figure for West Germany in 1989. Between 1989 and 1991 alone, the central government's budget deficit soared from 0.5 percent of national income to 5 percent.
Following a proposal developed by Waigel, the Kohl government agreed in February 1991 to an unexpectedly large package of tax increases – including a 7.5 percent surcharge on personal income and corporate tax payments – to help pay for reunification, as well as the government's contribution to the allied forces during the Gulf War and aid to Eastern Europe's fledgling democracies. In March 1992, Germany paid its final installment of $1.68 billion in Gulf War aid to the United States, fulfilling its overall pledge of $5.5 billion.
In the national debate on whether the federal government should remain in Bonn or move to Berlin, Waigel argued that Germany had assumed enough major financial obligations over the preceding years and could not afford to build a new capital.
In early 1996, Waigel and his French counterpart Jean Arthuis launched a French-German economic stimulus package aimed at encouraging spending, increasing growth, cutting taxes on business and reducing unemployment. In the subsequent years, however, both CDU and CSU favored increasing taxes, fearing the consequences of further budgetary cuts; by 1997, the government was already in danger of breaking a Constitutional Court ruling that spending on public investment must exceed the budget deficit. At the time, Germany had a record 2.2 trillion marks in public debt, much of it amassed during Waigel's tenure because of the costs of reunification.
During the period of Reunification in the 1990s, Waigel, as Minister of Finance, refused to return eight buildings in East Germany belonging to six Austrian Jewish citizens.
International economic policies
Soon after taking office, Waigel negotiated with his counterparts of the G7 on the difficult question of rankings in the voting hierarchy of the International Monetary Fund (IMF). Under the agreement, Japan and West Germany shared the No. 2 ranking at the agency, ahead of France and the United Kingdom. By 1991, Waigel was the driving force within the G7 to agree in principle that the Soviet Union should be offered a role in the IMF. In 1991, he became the first chairman of the board of the newly established European Bank for Reconstruction and Development (EBRD).