Olaf Scholz, the man most likely to succeed Angela Merkel as Germany's next chancellor, has previously expressed his support for U.S. President Joe Biden and is looking to reach agreement on global taxation rules with his administration.
The German finance minister has the best shot of forming a new German government after leading his Social Democratic Party (SPD) to a narrow victory on Sunday's parliamentary elections.
Scholz, considered a safe pair of hands in the SPD as a replacement for Merkel, congratulated Biden when he won the election against Donald Trump last November.
"Congratulations, Mr. President-elect @JoeBiden. Now is the chance to open a new and exciting chapter in transatlantic relations. The USA remains Europe's most important and closest partner. There is much to do. Good cooperation! #EveryVoteCounts," Scholz tweeted at the time.
On November 10, three days after the results of the U.S. election were called in Biden's favor, Scholz said former U.S. President Donald Trump needed to concede. Trump had not conceded the election and without providing evidence, alleged that the results were fraudulent.
On January 12, days before Biden assumed office, Scholz told a Reuters conference in Berlin that by summer he wanted to reach an agreement with the U.S. administration on an OECD blueprint to introduce global rules on corporate taxation.
The rules — which would allow more than 135 nations to collect up to 4 percent more corporate tax — were put forward by the group of rich nations in October and were strongly backed by Germany. The aim of the regulations is to ensure multinationals, including tech giants and European luxury goods companies, pay corporate taxes on some of their profits where they do business, rather where they register their subsidiaries. The plan also intends to introduce a minimum global tax rate to avoid countries competing to lower their taxes to lure large companies to their shores.
But progress on the agreement has been delayed due to U.S. opposition under the Trump administration. In June, Washington suspended talks with European nations, saying that the discussions had reached an "impasse."
The process was further derailed when France in November decided to impose its own digital services taxes on U.S. tech giants, including Apple, Facebook and Google. Washington decried the move as unfair trade practice because it mainly impacts American companies. Then U.S Treasury Secretary Steven Mnuchin threatened to impose tariffs on countries like France, which levied their own digital taxes.
Scholz meanwhile has opposed Paris's solo approach and supported the OECD plans, saying last year that a deal would strengthen national budgets and limit tax evasion, as well as reduce legal uncertainty for businesses.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Jack Dutton is a Newsweek Reporter based in Cape Town, South Africa. His focus is reporting on global politics and ... Read more
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