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German Chancellor denies any involvement in the “Cum-ex Files” case

“There was no political influence in the tax procedures,” said Olaf Scholz, in a tax fraud case that is making the German chancellor even less popular.

German Chancellor Olaf Scholz firmly denied this Friday, in a hearing by a parliamentary commission of inquiry into the “Cum-ex” scandal, having had any “influence” on the solution adopted in the complex case of tax fraud on profits.

Scholz began testifying at 12:00 GMT (1:00 pm in Lisbon) before the Hamburg parliament’s commission of inquiry about this fraud revealed in 2017. After having sworn to tell the truth and caused laughter by naming “lawyer” as a profession, the German chancellor went straight to the heart of the matter: “I had no influence on the Warburg fiscal process,” he said.

The “Cum-ex” scandal concerns an ingenious tax optimization device put in place by banks, which allowed foreign investors to reduce the taxes paid on their dividends. Dozens of people have been indicted in this case in Germany, including bankers, stockbrokers, lawyers, and financial advisers. In total, there are a dozen countries involved.

Among the incriminated banks is Hamburg’s Warburg, which should have refunded 47 million euros to the German port city, but the council withdrew in 2016. The bank ended up having to repay tens of millions of euros to the city under pressure from Chancellor Angela Merkel’s government.

Investigators are trying to find out whether political leaders – and, among them, Olaf Scholz, then mayor of the city – put pressure on the municipal tax authority to desist from collecting such taxes. “There was no political influence in the tax procedures”, insisted Scholz, removing “assumptions and insinuations” conveyed, according to him, by the media.

The decision to withdraw from the reimbursement of amounts owed by the Warburg bank to the city of Hamburg was taken shortly after a conversation between Olaf Scholz and Christian Olearius, then head of that bank.

Scholz denies, however, that he exerted pressure on the tax officials of the city of Hamburg, which he directed between 2011 and 2018. But new elements revealed in recent days call into question the statements of the current German chancellor. Several media outlets have revealed, in recent days, that e-mails from someone in Scholz’s close circle were seized by investigators and contain “potentially conclusive” elements about “reflections regarding the deletion of data”.

At the home of another German Social Democratic Party (SPD) deputy who may have played a role in the bank’s repayment, investigators discovered more than 200,000 euros in cash in a safe, which fuels suspicions about possible hidden financial deals. Other seized documents also suggest that Scholz, contrary to what he has claimed so far, actually addressed the issue of reimbursement directly with Christian Olearius.

Scholz reaffirmed that he had met with Olearius several times, but had no “concrete memory” of the issues discussed at those meetings. “There was no preferential treatment for Mr. Olearius”, he assured, however. The German tabloid newspaper Bild this Friday published excerpts from Olearius’ diary referring to a meeting between Scholz and him on October 26, 2016. “He asks questions, listens without expressing the slightest opinion and without indicating whether he intends to act or not,” he wrote. the banker after that meeting.

The opposition took the opportunity to criticize the current chancellor of Europe’s biggest economic power. “The latest revelations suggest that Olaf Scholz and his inner circle went out of their way to give little information … or voluntarily withhold it,” condemned Matthias Hauer, a conservative member of the Bundestag finance committee.

Such information gives a bad image to Olaf Scholz, who has already become less popular than some of his ministers less than a year after taking office. The chancellor has particular difficulty in reassuring German citizens, who are concerned about the possible lack of energy next winter, in particular gas, as a result of sanctions imposed on Moscow after the Russian invasion of Ukraine on 24 February this year.

Source: With Agencies

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