Finance: Research, Policy and Anecdotes

Helmut Kohl, 1930-2017

As most of my generation, I have a very ambiguous relationship to Helmut Kohl; on the one hand, he was not considered to be on the same intellectual level as his predecessor Helmut Schmidt, he was seen as opportunist who relied on relationships rather than principles. On the other hand, he is rightly considered as the father of the German unification – where others hesitated, he saw the unique window of opportunity (which might have closed only a year later with the disintegration of the Soviet Union) to push ahead and achieve what few had considered feasible a few years earlier: a unified, stable and democratic Germany.  Politically the right move, it came with some doubtful economic policy decisions – one of the major decisions was a conversion rate of East and West German marks of one-to-one, which turned East German companies completely uncompetitive and is one of the reason why Eastern Germany was not converted into “blooming landscapes” as he promised in 1990.  It was one of several economic policy mistakes (nicely documented by HW Sinn in his book “Kaltstart”), which came back to haunt the unified Germany in the early years of the 21st century   The second important decision taken in 1990 was that of the introduction of the euro – concession to the French president Mitterand for given his approval for the German unification. While praised as success story for the first 10 years, the governance structure of the Eurozone has been a major cause of the prolonged Eurozone crisis for the following ten years.


How ever one might evaluate Helmut Kohl’s policies and politics, he will enter the history book as the last chancellor of Western Germany and the first chancellor of the unified Germany (for the first time a unified and stable democratic Germany); he helped close a chapter of German and European history and push open a new one. For better or worse, he helped shape the political and economic ground on which today’s European policy makers have to play. A European giant!