Investors are also cheering Schäuble’s exit. (He’ll now preside over Germany’s Bundestag.) They hope that whoever replaces him will be more willing to spend the country’s large surplus, to the benefit of all eurozone members. Yet if anything, Schäuble’s departure introduces substantial risks. [...]
Despite his reputation, Schäuble is staunchly pro-European. The Liberal Free Democrats (FDP) — now most likely to claim the finance ministry given the recent election result — support more pan-European security and defense cooperation. But under its new leader, Christian Lindner, the party has veered sharply to the right on issues related to the eurozone, performing well with parts of the electorate as a result. [...]
Schäuble knew how to manage his troops and keep them in line, even as his government supported three bailouts for Greece and one each for Spain, Ireland and Cyprus. He was also able to keep an even keel when European Central Bank President Mario Draghi turned his institution into a fiscal backstop with his commitment “to do whatever it takes” to keep the eurozone intact in 2012. This went well beyond what most Germans believe the bank’s mandate should be.
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