While the world shut down, Germany’s Olaf Scholz has seized the moment

Like the empty plots of land that emerge after a hurricane has devastated a city, one surprising effect of the global pandemic has been the emergence of political blank slates – places where all our old expectations and habits have been wiped away by months of chaos and pent-up frustration, leaving a fresh canvas for the unthinkable or taboo.

The most visible of those openings is the one created in the United States, Canada and other countries in the space where complacency and casual intolerance used to live, and where public fury has led to new demands to end racial inequality – and commitments from some entrenched quarters.

An equally startling rupture has opened up here in the centre of Europe. It allowed an ambitious and unorthodox political actor to sell a new settlement that turns the world’s second largest economy into a single fiscal entity able to rescue itself from crisis.

Less than a month ago, it appeared that the European Union was in existence-threatening trouble, as were several of its member states, including Italy. Their economic ruin was driving their citizens against the EU itself.

Brussels had failed: It had no authority over health, it couldn’t borrow on a continent-wide level or transfer wealth to have-not countries – and it couldn’t solve the recurring problems created by the euro, which caused debt to pile up in the import-dependent southern states.

And at the centre of Europe’s paralysis was Germany, from where the greatest share of that debt had always flowed.

German leaders had long insisted that all debt must be national, that tight-money inflation-fighting monetary policy be favoured over growth-restoring policy, and that all budgets must be balanced at all times – the schwarze Null (“black zero”) policy of strict austerity. France had long pushed to solve these problems by allowing continent-wide bonds, but Berlin had steadfastly refused to go along – a refusal that caused the 2010 euro-crisis downturn to last years longer than necessary.

Open this photo in gallery:

On May 19, a blank slate appeared. Finance minister Olaf Scholz, who’d been seen by many as a political has-been with very conventional policies, suddenly announced that France and Germany had joined hands to call for the raising of half a trillion euros in continent-wide debt that would be passed to have-not states – and that he’d somehow convinced Chancellor Angela Merkel to go along.

Once the other EU countries joined in, with a bill likely to be completed in the coming days, that amount was raised to 750 billion; it also contains a mechanism that essentially makes “fiscal federalism” a permanent part of the EU.

As the Financial Times put it: “A country that was long ultra-cautious on Europe and wedded to balanced budgets seems to have had a Damascene conversion.” Playing the role of Damascus was the new coronavirus.

The political actor who stepped onto that suddenly empty stage, however, was not a changed man, I believe, but a careful plotter.

I knew Olaf Scholz when he was the mayor of Hamburg (a position more akin to premier of a province). He’d been an expansive figure, with open ambitions to become leader of his Social Democratic Party. (He failed at it last year, but may well try again.)

He was also interested in another hard-to-govern federal state – he’d borrowed the Canadian idea of citizenship ceremonies, part of an ambitious and successful scheme to invest in improving refugee integration. He seems to have also noticed the idea of equalization payments.

I should declare a bias – Mr. Scholz quoted one of my books in his inauguration speech, and invited me to his city hall in the mid-2010s to talk about how to turn its ideas into policy. In conversation, he also made it clear that he believed the euro crisis was amplified by Germany’s fiscal recalcitrance, and that a European fiscal union was the only way out. Over the next years, he made that point to many interlocutors, and hired people who shared that view, even as he publicly hewed to Ms. Merkel’s more austere views.

Some have likened Mr. Scholz this month to Alexander Hamilton, another politically ambitious finance minister who seized a moment to turn the 13 governments of the United States into a single fiscal entity. I don’t know if Mr. Scholz, a Boomer-aged guy, is the future of Germany. But he is Hamiltonian in a key sense – he kept his powder dry, waiting for a crisis to arise that would be the right moment to make a history-changing move. He wasn’t going to miss his shot.

Doug Saunders, The Globe and Mail’s international affairs columnist, is currently a Richard von Weizsaecker Fellow of the Robert Bosch Academy in Berlin.