Hans Matthöfer: German finance minister who confronted the 1970s economic crisis
Monday 28 December 2009
Hans Matthöfer was the West German trade unionist who became Finance Minister under Helmut Schmidt and battled against the world economic crisis of the late 1970s, but under pressure from forces within Germany and abroad was forced to change course.
Hans Matthöfer was born in Bochum, a coal and steel town, in 1925, the son of a Catholic crane operator who had been lamed as the result of an industrial accident. The family faced unemployment for several years. After completing elementary school, Hans was employed as a worker in various industrial enterprises before securing an apprenticeship in commerce. At 17, he was called up for compulsory labour service, and, from 1943 to 1945, served in the Panzer corps rising to the rank of sergeant (Unteroffizier); clearly he had leadership qualities.
After the war, Matthöfer's search for answers to explain Germany's catastrophic downfall led him to study languages, politics and economics, at first by self-study, and then at the University of Frankfurt on Main. There, from 1949 to 1951, he was chairman of the Social Democratic students' organisation. Earlier he had passed the interpreter's examination in English and he eagerly took the chance to spend two terms at the University of Wisconsin (Madison), returning to gain a degree in economics in 1953. In the same year he was appointed to a job in the economics department of the metal workers union, IG Metall, then the largest and most militant union in West Germany.
Between 1957 and 1961 he worked for the Organisation for European Economic Cooperation (OEEC) in Washington, and later, in Paris. At the beginning of 1961, Matthöfer was appointed head of the education department of IG Metall. In the same year, he was elected to the Bundestag. He remained a member of parliament until 1987. A self-taught Spanish speaker, he campaigned strongly for free trade unions in Franco Spain and Latin America.
In parliament, Matthöfer led a group of 70 Social Democratic colleagues demanding more co-determination in the workplace, and paid time off work to pursue education. He also opposed the emergency laws legislation (Notstandsgesetze) of 1968 passed by the grand coalition of Christian Democrats and Social Democrats against the opposition of 53 Social Democrats and the small Free Democratic Party. He, and others, feared a repeat of the misuse of such laws as had happened in the Weimar Republic leading to Hitler's dictatorship. The laws came into effect on 28 June 1968, marking the end of the special powers the Allied forces had been given over Germany in the Statute of Occupation of 21 September 1949.
Matthöfer's first experience of government came in December 1972 when he was appointed by Chancellor Willy Brandt junior minister in the Ministry for Economic Cooperation. In the governments of Helmut Schmidt, Matthöfer served as Minister for Research and Technology from 1974 to 1978 when he was appointed Minister of Finance. This was his most difficult assignment overshadowed, as he was, by his friend, Helmut Schmidt. They were faced with a difficult situation in the world economy. The OPEC producers had already raised the price of oil and, in 1978-9, the Islamic revolution in Iran resulted in another sharp increase. West Germany had a trade surplus and was under pressure from the United States, Britain and other countries to re-value the German mark upwards.
Pressure, too, came from the unions whose members feared unemployment. Strikes occurred in the metal and other industries. The government also faced terrorism and international tension. Although Schmidt and Matthöfer had warned against 'easy money' they were forced to change direction. In September 1978 budgetary expenditure was increased for the railways, research and development, construction and for Christmas tax-free bonuses for all employees. The Federal Republic went into deficit on its foreign trade.
The coalition partner Free Democrats pulled in the direction of cuts in public expenditure and eventually brought Schmidt down.
A sick man, in 1982, Matthöfer left the Finance Ministry and served briefly as Minister of Post and Telecommunications. On 19 February 1982 he excited some attention when in a television chat show he responded to being squirted with water from a pistol by emptying a glass of wine over his anarchist assailant, Fritz Teufel.
Between 1973 and 1984 Matthöfer belonged to the Social Democratic party's executive committee, followed by a position as its treasurer between 1985 and 1987. From 1987 to 1997 he was president of the BGAG, an investment company owned by the trade unions.
Hans Matthöfer married Traute Mecklenburg in 1951. From Stettin, she was a nurse who later became a social worker. She shared her husband's concerns and, in 1995, they established a trust to provide scholarships for young people wanting to research in trade union issues, humanisation of the work environment, international cooperation and similar areas. Matthöfer died in Bad Soden am Taunus, a spa town in Hesse, after a long illness.
Hans Matthöfer, politician: born Bochum, Germany 25 September 1925; married 1951 Traute Mecklenburg (died 2008); died Bad Soden am Taunus 15 November 2009.
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