Social Democratic co-leader Lars Klingbeil will become Germany's next finance minister, putting him in charge of the wallets of Europe's largest country as it prepares to release hundreds of billions of euros to overhaul its infrastructure and armed forces.
Klin Beal’s strong role in the next administration, which will also be combined with the position of the vice-chancellor, confirmed on Wednesday that his party announced that its members had approved a coalition agreement with the center-right Christian Democratic Party (CDU).
This paves the way for CDU leader Friedrich Merz, who is elected next week by the German parliament as the next prime minister.
Klingbeil, 47, led the Social Democratic Party (SPD) to its worst result since the national election in February 1887, when his party finished third with 16 percent, as the government led by Prime Minister Olaf Scholz was led by Prime Minister Olaf Scholz.
But Klingbeil, a professional politician who earned his reputation as a shrewd political operator, managed to shift responsibility for the outcome and led the party’s coalition negotiations with the CDU.
In the SPD, he was seen as savvyly browsing the talks and received €50 billion in funding to invest in Germany’s neglected infrastructure in exchange for agreeing to abandon the strict U.S. lending rules to enable unlimited spending on defense.
He and SPD co-leader Saskia Esken have received seven ministries for their party, while the CDU and its Bavarian sister party have 10 departments and have been supported by campaign commitments, including tax breaks for tax cuts, protection of pensions and temporary commitments, and a minimum wage of 15 euros of 15 euros.
Partisan bases approved the deal nearly 85% despite the SPD Youth United vowed to reject the deal, which raised objections to elements that include its stronger stance on immigration. It will be signed on Monday, with Merz being elected Prime Minister the next day.
Clinbel’s most pressing task is to develop a 2025 budget to replace temporary vulnerabilities after the previous administration’s premature collapse, as well as the 2026 budget.
He will take over the Ministry’s in-rope from former Goldman Sachs banker Jörg Kukies and will need to develop a plan to spend 30 billion euros of the infrastructure fund dedicated to the federal level.
The fund is the central plan for the next government to plan to restore a stagnant economy, which suffered the most lasting downturn in post-war history.
Klingbeil is the son of a German soldier with no background in finance or economics. He studied political science at university and has been leaning towards foreign policy since he first entered parliament at the age of 27.
However, he is expected to make up for his lack of expertise by surrounding his expertise with a strong team, said Jens Südekum, a professor of international economics in Düsseldorf, who served as an informal consultant to Klingbeil.
While Klinby is "obviously not a schäuble type", it refers to the famous hawkish finance minister in Germany, Wolfgang Schäuble, who died in 2023, he said that Sudkum said he would be more cautious than some observers would expect.
"He likes to be seen as an adult in the room. People who make sure the federal government acts responsibly," Sudkum said.
Klingbeil has established a strong working relationship with Merz, and the two men agreed to speak to each other last month using an informal German "DU".
Marion Mühlberger, an economist and political analyst at Deutsche Bank Research, said the market will focus on “the speed at which the new government sets budgets” and whether it can pass before the summer break.
SPD said the remaining cabinet picks will be announced on Monday.