VARIOUS: HANS EICHEL NOMINATED AS NEW FINANCE MINISTER REPLACING OSKAR LAFONTAINE AS WORLD MARKETS REACT

Record ID: 872574

  • Title: VARIOUS: HANS EICHEL NOMINATED AS NEW FINANCE MINISTER REPLACING OSKAR LAFONTAINE AS WORLD MARKETS REACT
  • Date: 12th March 1999
  • Summary: SCU DEALER SCREENS SHOWING EURO FALLING
  • Embargoed: 27th March 1999 12:00
  • Keywords:
  • Location: SARBRUECKEN, BONN AND FRANKFURT, GERMANY / NEW YORK, UNITED STATES / TOKYO, JAPAN / LONDON, ENGLAND, UNITED KINGDOM
  • City:
  • Country: Germany
  • Topics: Finance,Domestic Politics
  • Reuters ID: LVA9FWRM1GCE6RP4RKD1DEFC84BQ
  • Aspect Ratio:
  • Story Text: German Chancellor Gerhard Schroeder has nominated Hans Eichel as the new finance minister to replace Oskar Lafontaine, leader of the Social Democrats.
    World markets have reacted favourably to the resignation of former Finance Minister Oskar Lafontaine.
    Lafonteine disappeared behind the gates of his home near the French border on Friday (March 12) - and so completely shut out the world that he even refused to take calls from Chancellor Schroeder.
    Eichel's appointment as German finance minister is expected to put the reins of power firmly back in Chancellor Schroeder's hands, and spell an end to months of political pressure on the European Central Bank.
    Eichel, ousted as SPD premier of Hesse state in an election last month, is a bland but able technocrat with a more moderate stance than left-wing Oskar Lafontaine, whose resignation as finance minister and SPD chairman sparked a share rally on Friday.
    Schroeder said he planned no other cabinet changes and added that the SPD's governing coalition with the ecologist Green party, formed after the election last September, would go on until the next parliamentary poll in 2002.
    World markets reacted favourably to Lafontein's departure.
    In Tokyo, the dollar rose againmst the euro.
    Lafontaine's departure was a gift for Britain's top-selling newspaper, The Sun.
    "We haf vays of making you QUIT," the front page of the tabloid's Friday edition screamed, adopting the cliched German accent beloved of some British comedy shows.
    Late last year, the anti-European Sun labelled Lafontaine "the most dangerous man in Europe" for his plans to harmonise tax rates across Europe.
    Friday's edition said the Sun's condemnation of the German finance minister had prompted a joint plot by the European Union's 15 member states to buoy up the struggling euro, part of which involved Lafontaine's political assassination.
    The paper said British Prime Minister Tony Blair was secretly delighted by the demise of "Red Oskar", adding that he would now look to forge a powerful axis in Europe with Schroeder.
    European shares closed mixed on Friday.They rose after Lafontaine's departure, but were later hit by profit-taking and by Wall Street, which faltered in its march to the magic 10,000 level.
    The Dow Jones industrial average of leading U.S.shares romped almost 60 points higher to 9,958 but then edged back and was around 0.9 percent or 20 points down when European trading drew to a close.
    Germany was the star.Frankfurt closed five percent higher as investors welcomed the resignation of Lafontaine and the nomination of Eichel.
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