Hans Eichel
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Hans Eichel (born 24 December 1941) is a German politician ( SPD) and the co-founder of the G20, or "Group of Twenty", an international forum for the governments and
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
governors of twenty developed and developing nations to discuss policy issues pertaining to the promotion of international financial stability. He was Germany's Minister of Finance between 1999 and 2005. Eichel was chairman of the G7 in 1999 and chairman of the G20 in 2004. Before that, Eichel served as the 6th Minister President of
Hesse Hesse or Hessen ( ), officially the State of Hesse (), is a States of Germany, state in Germany. Its capital city is Wiesbaden, and the largest urban area is Frankfurt, which is also the country's principal financial centre. Two other major hist ...
from 1991 to 1999 and as the 52nd President of the Bundesrat in 1998/99. During his time in office, Eichel played a very important role in two landmark reforms – the far reaching reform of German society and economy (also known as Agenda 2010) and the creation of the G-20 to reflect the rebalancing of world power. Some argue that Agenda 2010 helped turn Germany from the 'sick man of Europe' into the best performing major Western economy after the
2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
. While some parties regarded it as the most successful economic reforms in Germany in over half a century, as well as in any G7 country in 30 years, it also created massive controversy and protests. The effects of the Agenda 2010 on German economic development remain disputed. As chairman of the G7, Eichel initiated the creation of the G20 together with then US Treasury Secretary Larry Summers and hosted its inaugural meeting in Berlin. The G20 rapidly grew to become the most influential economic body in the world. Eichel went on to serve as chairman of the G20 in 2004, when he pressed for the reforming of the international financial architecture and establishing a code of conduct on preventing financial crises.


Early life and education

Eichel was brought up in
Kassel Kassel (; in Germany, spelled Cassel until 1926) is a city on the Fulda River in North Hesse, northern Hesse, in Central Germany (geography), central Germany. It is the administrative seat of the Regierungsbezirk Kassel (region), Kassel and the d ...
where he did his
Abitur ''Abitur'' (), often shortened colloquially to ''Abi'', is a qualification granted at the end of secondary education in Germany. It is conferred on students who pass their final exams at the end of ISCED 3, usually after twelve or thirteen year ...
in 1961. He then completed a degree in German,
philosophy Philosophy ('love of wisdom' in Ancient Greek) is a systematic study of general and fundamental questions concerning topics like existence, reason, knowledge, Value (ethics and social sciences), value, mind, and language. It is a rational an ...
,
political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and Power (social and political), power, and the analysis of political activities, political philosophy, political thought, polit ...
,
history History is the systematic study of the past, focusing primarily on the Human history, human past. As an academic discipline, it analyses and interprets evidence to construct narratives about what happened and explain why it happened. Some t ...
and
education Education is the transmission of knowledge and skills and the development of character traits. Formal education occurs within a structured institutional framework, such as public schools, following a curriculum. Non-formal education als ...
at the universities of
Marburg Marburg (; ) is a college town, university town in the States of Germany, German federal state () of Hesse, capital of the Marburg-Biedenkopf Districts of Germany, district (). The town area spreads along the valley of the river Lahn and has ...
and
Berlin Berlin ( ; ) is the Capital of Germany, capital and largest city of Germany, by both area and List of cities in Germany by population, population. With 3.7 million inhabitants, it has the List of cities in the European Union by population withi ...
, graduating in 1970. After that, he worked as a teacher for five years in a Kassel Gymnasium, the Wilhelmsgymnasium, before winning election as the mayor of Kassel at age 33.


Political career


Career in local politics

In his early days, Eichel was known for his campaigns for green causes and against nuclear weapons but for most of his political career, he became associated with stimulating investment and creating jobs. He was noted for his consensus building skills and an ability to mix pragmatism with a mastery of detail. Eichel believed strongly in
European federation A federal Europe, also referred to as the United States of Europe (USE) or a European federation, is a hypothetical scenario of European integration leading to the formation of a sovereign state, sovereign superstate (similar to the United Sta ...
and on merging Europe's armies and foreign services, and on giving them a single foreign minister. He argued that Europe would be very much stronger if it spoke to the outside world with one voice. From 1975 to 1991, Eichel served as
mayor In many countries, a mayor is the highest-ranking official in a Municipal corporation, municipal government such as that of a city or a town. Worldwide, there is a wide variance in local laws and customs regarding the powers and responsibilitie ...
of Kassel, initially gaining the office at the age of only 33.


Minister-President of Hesse, 1991–1999

From 1991 to 1999, Eichel was the Minister-President of
Hesse Hesse or Hessen ( ), officially the State of Hesse (), is a States of Germany, state in Germany. Its capital city is Wiesbaden, and the largest urban area is Frankfurt, which is also the country's principal financial centre. Two other major hist ...
in a coalition government with the Green Party. The coalition won again four years later and was the first red-green coalition to serve two consecutive terms. Eichel also served as
President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university *President (government title) President may also refer to: Arts and entertainment Film and television *'' Præsident ...
of the Bundesrat from November 1998 to April 1999. However, he unexpectedly lost the 1999 state elections to Roland Koch's CDU and lost his office.


Minister of Finance, 1999–2005

In March 1999, Oskar Lafontaine resigned as Minister of Finance in the government of
Chancellor Chancellor () is a title of various official positions in the governments of many countries. The original chancellors were the of Roman courts of justice—ushers, who sat at the (lattice work screens) of a basilica (court hall), which separa ...
Gerhard Schröder Gerhard Fritz Kurt Schröder (; born 7 April 1944) is a German former politician and Lobbying, lobbyist who served as Chancellor of Germany from 1998 to 2005. From 1999 to 2004, he was also the Leader of the Social Democratic Party of Germany (S ...
, and Eichel replaced him a month later. He served as a member of the
Bundestag The Bundestag (, "Federal Diet (assembly), Diet") is the lower house of the Germany, German Federalism in Germany, federal parliament. It is the only constitutional body of the federation directly elected by the German people. The Bundestag wa ...
from
2002 The effects of the September 11 attacks of the previous year had a significant impact on the affairs of 2002. The war on terror was a major political focus. Without settled international law, several nations engaged in anti-terror operation ...
to 2009. At the beginning of his term, Eichel tried to decrease the German federal deficit and wanted a
balanced budget A balanced budget (particularly that of a government) is a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (the accounts "balance"). More generally, it is a budget that has no budge ...
until 2006. Initially he was successful and earned the nickname Iron Hans or Iron Minister because of his ability to exercise strict budget discipline. ''The Economist'' magazine's description of him: ''It was Mr Eichel who achieved Germany's biggest tax cuts in half a century, preached a fierce austerity, and stuck rigidly to a policy of squeezing the budget. For two years after taking over as finance minister in 1999 from the left-wing, fiscally extravagant Oskar Lafontaine, Mr Eichel was the government's star. Despite his penchant for spending cuts, he was widely admired for his integrity, courage, and unwavering loyalty to Chancellor
Gerhard Schröder Gerhard Fritz Kurt Schröder (; born 7 April 1944) is a German former politician and Lobbying, lobbyist who served as Chancellor of Germany from 1998 to 2005. From 1999 to 2004, he was also the Leader of the Social Democratic Party of Germany (S ...
'' Despite initial success, due to constraints by the cabinet and by the worsening economic situation after the short boom in 1999/2000, he had to abandon those plans. After the election Eichel had to recalculate the budget due to the deteriorating economy and found that he would have $18 billion less in tax revenue than was anticipated. The German budget deficit was 3.8%, exceeding the 3% ceiling set by the EU's Stability Pact. Until 2005, when he stepped down, Eichel did not reduce the deficit to under the 3% stability threshold, mainly due to the decision from Chancellor Schroder to not force excessive austerity on the German people on top of the deep economic reforms taking place. Toward the end of his term, in late 2004, Eichel and U.S. Treasury Secretary John W. Snow worked out a proposal to cancel 80 percent, or about $33 billion, of the debt owed by
Iraq Iraq, officially the Republic of Iraq, is a country in West Asia. It is bordered by Saudi Arabia to Iraq–Saudi Arabia border, the south, Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq border, the east, the Persian Gulf and ...
to a group of creditor nations known as the Paris Club, capping an American effort for debt forgiveness.


Controversy

Eichel had a public spat in 2003 with then
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) chief
Horst Köhler Horst Köhler (; 22 February 1943 – 1 February 2025) was a German politician who served as President of Germany from 2004 to 2010. As the candidate of the two Christian Democratic sister parties, the Christian Democratic Union of Germany, CDU ...
, accusing Köhler and the IMF of being too harsh on Germany and too soft on the risks and policy failures of the United States. Köhler defended the harsh criticism of Germany and rejected the notion that the IMF was too soft on the US. However, experts pointed out in 2003 that there was growing evidence that the IMF was reluctant to explore the more problematic aspects of American economic and financial policies such as the concentration of derivative risks at a few big US financial institutions and early warning signs of the building up of risks in
Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the New ...
and
Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is an American publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons, Virginia.2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
radiating out of the US, happening in parallel with the renaissance of the German economy, would suggest that Eichel was in the right. After the tax reforms of 2001 and 2002, the German banking industry association sent Eichel's internal revenue ministry three letters in total in late 2002 and early 2003 warning about a tax loophole allowing investors to receive more than one tax reimbursement for a single short transaction. Depending on how many times investors short sold a share in a period of 48 hours after a dividend disbursement, tax refunds were erroneously paid out up to four or five times for that single short-sell transaction. Eichel's ministry took no corrective action in response, and from that time forward, gradually larger and larger amounts of forfeited tax revenue resulted.


G-20

The G-20 was created in 1999, after the
1997 Asian financial crisis The 1997 Asian financial crisis gripped much of East Asia, East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide eco ...
, as a forum for cooperation and consultation on matters pertaining to the international financial system. According to senior researchers at the Brookings Institution, the G-20 was founded at the initiative of Eichel, then German finance minister who was also concurrently chair of the G-7. Other sources identify Hans Eichel, US Treasury Secretary Larry Summers, and Canadian Finance Minister
Paul Martin Paul Edgar Philippe Martin (born August 28, 1938), also known as Paul Martin Jr., is a Canadian lawyer and retired politician who served as the 21st prime minister of Canada and the leader of the Liberal Party of Canada from 2003 to 2006. Th ...
as the three key initiators. According to University of Toronto professor John Kirton, the membership of the G-20 was decided by Eichel's assistant Caio Koch-Weser and Summers' assistant
Timothy Geithner Timothy Franz Geithner (; born August 18, 1961) is an American former central banker who served as the 75th United States secretary of the treasury under President Barack Obama from 2009 to 2013. He was the President of the Federal Reserve Bank o ...
. In Kirton's book 'G20 Governance for a Globalised World', ''Geithner and Koch-Weser went down the list of countries saying, Canada in, Spain out, South Africa in, Nigeria and Egypt out, and so on; they sent their list to the other G7 finance ministries; and the invitations to the first meeting went out.'' The group was formally inaugurated in September 1999, Canadian finance minister
Paul Martin Paul Edgar Philippe Martin (born August 28, 1938), also known as Paul Martin Jr., is a Canadian lawyer and retired politician who served as the 21st prime minister of Canada and the leader of the Liberal Party of Canada from 2003 to 2006. Th ...
was chosen to be the first chairman and German finance minister Hans Eichel hosted the first G-20 meeting of
finance minister A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfoli ...
s in December 1999 in Berlin.


Other activities

Eichel currently leads the expert group on sustainable structural development for the Friedrich Ebert Foundation, the world's oldest and largest foundation to promote democracy and political education. In addition, Eichel has been holding various paid and unpaid positions since leaving active politics, including the following: * WMP Eurocom, Member of the supervisory board (2010-2020) *
Institute for Law and Finance An institute is an organizational body created for a certain purpose. They are often research organisations (research institutes) created to do research on specific topics, or can also be a professional body. In some countries, institutes ca ...
at the
Goethe University Frankfurt Goethe University Frankfurt () is a public research university located in Frankfurt am Main, Germany. It was founded in 1914 as a citizens' university, which means it was founded and funded by the wealthy and active liberal citizenry of Frankfurt ...
, Member of the Board of Trustees * Official Monetary and Financial Institutions Forum (OMFIF), Member of the Advisory Board * Rheingau Musik Festival, Member of the Board of Trustees * Deutsche Sporthilfe, Member of the Foundation's Council * '' 7000 Oaks Foundation'', Member of the Board of TrusteesBoard of Trustees
'' 7000 Oaks Foundation''.


References


External links


Website from Hans Eichel




{{DEFAULTSORT:Eichel, Hans 1941 births Living people Politicians from Kassel German Protestants University of Marburg alumni Presidents of the German Bundesrat Minister-presidents of Hesse Members of the Bundestag for Hesse Finance ministers of Germany Members of the Bundestag 2005–2009 Members of the Bundestag 2002–2005 Members of the Bundestag for the Social Democratic Party of Germany