The Chancellor is set to be grilled about how much he knew as Mayor of Hamburg (Image: Getty)
Beleaguered will be grilled over his alleged involvement in the country’s biggest tax fraud scandal.
decision to sack his Finance Minister Christian Lindner last month collapsed and triggered elections in February that look set to be a bruising encounter for his centre-left Social Democratic Party.
But things could get considerably worse with the Chancellor due to appearing before a parliamentary investigation committee for a third time today about a scheme which saw the defrauded by around €36 billion (£30bn) due to improper tax reimbursements.
Farid Müller, a member of the investigation committee for the Greens, said: “We are continuing our search to find out whether or not there was any form of political influence in the prosecution.”
is set to be questioned over his dealings with one of the banks involved in the affair, the former HSH Nordbank. In 2014, after a law firm scrutinised its transactions between 2008 and 2011, the former HSH Nordbank paid around €126 million to the tax authorities.
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HSH Nordbank is one of dozens of organisations and individuals under investigation. (Image: Getty)
In such transactions, known as “cum-ex” transactions, investors trick tax authorities by trading around a stock dividend date to receive multiple refunds of capital gains tax that they had not previously paid or only paid once.
Scholz is not accused of carrying out the fraud, but questions remain over how much information was made public regarding the state-owned HSH Nordbank.
Scholz, who at the time was the Mayor of Hamburg, faces a grilling over how much he knew of the transactions and whether or not he did enough to address the allegations.
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Scholz is just one EU leader currently facing severe domestic pressure. (Image: Getty)
Julia Klöckner, a senior lawmaker from the center-right Christian Democratic Union said: “Scholz is responsible for the fact that the state has lost millions of taxpayers’ money.
“Of course that will play a role in the election campaign, because it’s about his credibility.”
The scandal could be a key talking point throughout the election, with Scholz’s political rivals unlikely to pass up the opportunity to bring the leader’s character into question.
Fabio De Masi, a European lawmaker for the left-wing Bündnis Sahra Wagenknecht alliance who closely followed the tax evasion scandal, said: “Many state banks were affected by the financial crisis, including HSH Nordbank.
“In my view, the cum-ex transactions were a way of recapitalising very cheaply behind the public’s back, without bailout packages.”