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Germany may finally be about to get a new governmen t. The deal struck this week between Angela Merkel’s Christian Democrats and the Social Democrats paves the way for the chancellor’s third grand coalition. SPD party members still need to improve the deal which saw the party secure a number of plum cabinet posts.
Top of the list is the finance ministry, the second most powerful post in the cabinet and a linchpin of the eurozone, which has been earmarked for Olaf Scholz. So who is the man set to be Europe’s most powerful finance minister? In a profile Guy Chazan writes that the mayor of Hamburg comes from pragmatic wing of the SPD and may bring a different style to the office vacated by the fiscal hawk Wolfgang Schäuble. But in terms of policy substance, expect more continuity than radical departure. “He won’t go around Europe lecturing people the way Schäuble did,” one SPD MP told Guy, adding “But that doesn’t mean Germany will suddenly turn on the money taps.”
A labour lawyer by training, Scholz’s technocratic and deadpan style earned him the nickname “Scholz-o-mat” — half-man, half-robot — when he oversaw controversial reforms to Germany’s welfare state and labour market at the turn of the century. “I had to display a certain ruthlessness,” Scholz later acknowledged. Or as one of his party colleagues puts it: “He’s very German: he won’t do anything crazy.”
Ballistic ballet: The spectacular debut this week of Falcon Heavy, built by the company SpaceX, potentially opens up deep space to reusable rockets, making exploration commercially viable. But, writes Anjana Ahuja, it also cedes to the private sector mastery of an infinite territory once monopolised by governments. As Marx might have put it, private enterprise has seized the means of propulsion.
Healthy finances: The British love their National Health Service. They are also sceptical about any calls for higher taxes, sensing that any extra money raised will not go to what they regard as priorities. So how to square the circle? The answer, writes Nick Macpherson is through hypothecation - explicitly earmarking taxes for a specific spending programme.
Prehistory lessons: One of Britain’s first human inhabitants had dark brown or black skin, scientific analysis has revealed. Henry Mance wonders whether this week's discovery of Cheddar Man could reshape our understanding of what it is to be British and, indeed, politics today.
Best of the week
The corporate debt problem refuses to recede by Gillian Tett
Jay Powell’s challenge at the Fed by Lawrence Summers
The American way of healthcare by Rana Foroohar
How we miss the courage of the suffragettes by Pilita Clark
Jacob Rees-Mogg pounces on Britain’s vulnerable institutions by Janan Ganesh
No winners in Syria after seven years of savagery by David Gardner
A tech-savvy generation of Muslim women driving global growth by Saadia Zahidi
The discreet terror of the American bourgeoisie by Edward Luce
Algorithms at work signal a shift to management by numbers by Sarah O'Connor
Social media users of the world unite! by John Thornhill
Flu risks apply pressure on science for a universal vaccine by Anjana Ahuja
Pacifist Germany defies Europe’s nationalist tide by Philip Stephens
German politics is tilting towards federalism by Wolfgang Munchau
What you've been saying
Unite and drive forward! Letter by Fiona O'Malley, Dublin
As the state of chaos continues in British politics, the Cabinet would do well to observe the dying minutes of last weekend’s Six Nations rugby international between Ireland and France. There they may learn what can be accomplished when a collective unites and drives forward in a focused and above all disciplined manner. The result lifted the Irish nation. Perhaps this too could be achieved for Britain.
Comment from Brisavoine on Philip Stephens' column "Pacifist Germany defies Europe’s nationalist tide"
The European nation most able to shoulder more of the defense burden is France, not Germany. Germany has no modern army to speak of. It's basically a large summer camp for unhappy conscripts. They can't even be deployed abroad. France on the other hand has both the know-how and the will to project abroad, plus a rising military budget (see the news in the French media only yesterday, Macron is going to spend 295 billion euros on the military between 2019 and 2025). There is not other European country except Russia (and perhaps much smaller ones like in the Baltic states) which is increasing military spending in such vast amounts.
Allow dogs into the office and good ideas will follow. Letter from Alexander Brunner, Zurich, about Tim Harford's column “Like great coffee, good ideas percolate slowly”
After the financial crisis, I joined a family office eventually ending up at a bank in Switzerland, heading the impact investing efforts. What struck me in my new position was the highly conservative culture (no dogs were allowed at the office, as they had been at Ben & Jerry’s) with its dismally low diversity and strong resistance to new ideas. This had profoundly baffled me until I read Tim Harford’s brilliant column. He points out that over-regulation shields companies and banks from competition. As a result, good ideas such as sustainable or impact investing are not picked up willingly. I do think that the regulator is partially to blame for that (think of the new Mifid II rules with 16,000 paragraphs!). I fully agree with Mr Harford: people only grasp for good ideas in desperation, when they have no other choice.
NHS finances can be fixed by breaking with Treasury orthodoxy Voters like a tax earmarked for services they value. We should give it to them
Theresa May still has work to do to fix Britain’s gig economy
It was a chance to tackle flaws in the flexible-labour market — but she did not take it
Free Lunch: The origins of money
Lessons from economic history
Cheddar Man’s early influence on British politics
Prehistoric fragments of earthenware suggest a ‘secret pot’ to stop Brexit
Person in the News: Olaf Scholz, a sound guardian for Germany’s finances
A tough negotiator, the popular Hamburg mayor is praised for his grasp of detail
Undercover Economist: A sloth’s guide to surviving a week of market volatility
Investors should work to a long timescale rather than the frenetic fast-twitch world
Olympics: North and South Korea must seize this political moment
It is vital that the goodwill does not melt after the competition, writes Ban Ki-moon
Opinion today: Rough markets pitch and roll
How should investors and policymakers react to this week’s sudden market volatility?
FT View: Where Brexit hits hard, a customs union will help
The regions of the UK that voted to leave have the most to lose
FT View: South Africans deserve their day of reckoning
Edging Jacob Zuma out will be delicate, but he should not be let off the hook
FT View: Poland’s Holocaust law has worrying echoes Attempts to control historical narratives recall the communist past
FT View: The Bank of England takes a hawkish turn Brexit is already having profound effects on the UK economy