Hans Eichel

Hans Eichel (born 24 December 1941) is a German politician (SPD) and the co-founder of the G20, or "Group of Twenty", an international forum for the governments and central bank governors of twenty developed and developing nations to discuss policy issues pertaining to the promotion of international financial stability.

Eichel was brought up in Kassel where he did his Abitur in 1961.

He then completed a degree in German, philosophy, political science, history and education at the universities of Marburg and Berlin, graduating in 1970.

After that, he worked as a teacher for five years in a Kassel Gymnasium, the Wilhelmsgymnasium, before winning election as the mayor of Kassel at age 33.

In his early days, Eichel was known for his campaigns for green causes and against nuclear weapons but for most of his political career, he became associated with stimulating investment and creating jobs.

He was noted for his consensus building skills and an ability to mix pragmatism with a mastery of detail.

Eichel believed strongly in European federation and on merging Europe's armies and foreign services, and on giving them a single foreign minister.

He argued that Europe would be very much stronger if it spoke to the outside world with one voice.

From 1975 to 1991, Eichel served as mayor of Kassel, initially gaining the office at the age of only 33.

Before that, Eichel served as the 6th Minister President of Hesse from 1991 to 1999 and as the 52nd President of the Bundesrat in 1998/99.

From 1991 to 1999, Eichel was the Minister-President of Hesse in a coalition government with the Green Party.

The coalition won again four years later and was the first red-green coalition to serve two consecutive terms.

Eichel also served as President of the Bundesrat from November 1998 to April 1999.

He was Germany's Minister of Finance between 1999 and 2005.

Eichel was chairman of the G7 in 1999 and chairman of the G20 in 2004.

However, he unexpectedly lost the 1999 state elections to Roland Koch's CDU and lost his office.

In March 1999, Oskar Lafontaine resigned as Minister of Finance in the government of Chancellor Gerhard Schröder, and Eichel replaced him a month later.

For two years after taking over as finance minister in 1999 from the left-wing, fiscally extravagant Oskar Lafontaine, Mr Eichel was the government's star.

Despite his penchant for spending cuts, he was widely admired for his integrity, courage, and unwavering loyalty to Chancellor Gerhard Schröder''

Despite initial success, due to constraints by the cabinet and by the worsening economic situation after the short boom in 1999/2000, he had to abandon those plans.

After the election Eichel had to recalculate the budget due to the deteriorating economy and found that he would have $18 billion less in tax revenue than was anticipated.

The German budget deficit was 3.8%, exceeding the 3% ceiling set by the EU's Stability Pact.

He served as a member of the Bundestag from 2002 to 2009.

Eichel had a public spat in 2003 with then International Monetary Fund (IMF) chief Horst Köhler, accusing Köhler and the IMF of being too harsh on Germany and too soft on the risks and policy failures of the United States.

Köhler defended the harsh criticism of Germany and rejected the notion that the IMF was too soft on the US.

However, experts pointed out in 2003 that there was growing evidence that the IMF was reluctant to explore the more problematic aspects of American economic and financial policies such as the concentration of derivative risks at a few big US financial institutions and early warning signs of the building up of risks in Fanny Mae and Freddie Mac.

The public and global sentiment in 2003 was against Eichel as Germany was then viewed as the 'sick man of Europe' but consequently, the developments of the global financial crisis radiating out of the US, happening in parallel with the renaissance of the German economy, would suggest that Eichel was in the right.

Eichel went on to serve as chairman of the G20 in 2004, when he pressed for the reforming of the international financial architecture and establishing a code of conduct on preventing financial crises.

Toward the end of his term, in late 2004, Eichel and U.S. Treasury Secretary John W. Snow worked out a proposal to cancel 80 percent, or about $33 billion, of the debt owed by Iraq to a group of creditor nations known as the Paris Club, capping an American effort for debt forgiveness.

Until 2005, when he stepped down, Eichel did not reduce the deficit to under the 3% stability threshold, mainly due to the decision from Chancellor Schroder to not force excessive austerity on the German people on top of the deep economic reforms taking place.

At the beginning of his term, Eichel tried to decrease the German federal deficit and wanted a balanced budget until 2006.

Initially he was successful and earned the nickname Iron Hans or Iron Minister because of his ability to exercise strict budget discipline.

The Economist magazine's description of him:

''It was Mr Eichel who achieved Germany's biggest tax cuts in half a century, preached a fierce austerity, and stuck rigidly to a policy of squeezing the budget.

During his time in office, Eichel played a very important role in two landmark reforms – the far reaching reform of German society and economy (also known as Agenda 2010) and the creation of the G-20 to reflect the rebalancing of world power.

Some argue that Agenda 2010 helped turn Germany from the 'sick man of Europe' into the best performing major Western economy in the aftermath of the global financial crisis.

While some parties regarded it as the most successful economic reforms in Germany in over half a century, as well as in any G7 country in 30 years, it also created massive controversy and protests.

The effects of the Agenda 2010 on German economic development remain disputed.

As chairman of the G7, Eichel initiated the creation of the G20 together with then US Treasury Secretary Larry Summers and hosted its inaugural meeting in Berlin.

The G20 rapidly grew to become the most influential economic body in the world.