German economic chief quits after helping promote relative's business venture Resignation could incite battle in party in ruling coalition

January 04, 1993|By Los Angeles Times

BONN, Germany -- Economics Minister Juergen Moellemann resigned yesterday after admitting that he had used his influence to promote a relative's business venture.

Chancellor Helmut Kohl, who had been expected to replace Mr. Moellemann anyway in a midterm Cabinet shuffle later this month, accepted the resignation in a terse statement that made no mention of the scandal.

The post of economics minister is a crucial one, given that Germany is in a recession, economic recovery in east Germany is behind schedule and Mr. Kohl has yet to complete a "solidarity pact" with unions, industry, and state and local governments to hold costs down and spread the burden of German unification.

Although one of Mr. Moellemann's chief goals was to make major cuts in government subsidies for industry, he was never able to ZTC gain enough support for his program.

Mr. Moellemann's resignation is likely to set off more infighting in his tiny Free Democratic Party, the junior partner in Bonn's center-right coalition.

The party was embarrassed last fall by a vicious tug-of-war between the older, established leadership and young members of the rank and file over who would replace its most prominent member of Mr. Kohl's Cabinet, Foreign Minister Hans-Dietrich Genscher, who is retiring.

Mr. Moellemann was seen as a prime agitator in that fight, and he was called an "intriguing swine" by one political rival.

An ambitious former teacher who came into the high-profile job with no economics expertise, the 47-year-old Mr. Moellemann blamed overwork for his downfall and denied any wrongdoing.

Returning from a two-week Caribbean vacation, Mr. Moellemann told a news conference that he was stepping down to avoid "the public squabbling that would probably be inevitable if I remained in the ministry."

The scandal involved letters on official stationary encouraging supermarket chains to invest in a security system that used plastic tokens instead of coins as deposits for grocery carts. The system, described as "a clever idea" in the letters, was owned by Mr. Moellemann's cousin.

Mr. Moellemann initially denied that he had signed the letters, insisting that a well-meaning aide had used presigned stationary for the mailing a year ago. But the aide was not identified, and Mr. Moellemann acknowledged yesterday that "I alone bear the responsibility."

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