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Karl-Heinz Paqu?


Talk about putting theory into practice. Karl-Heinz Paqu? gave up a secure job as an economics professor to become finance minister in the east German state of Saxony-Anhalt. Now, less than a year after taking office, he must cope with a $550 million shortfall in tax receipts, a sum equal to almost 5% of the state's budget. "It is completely different from academics," Paqu? deadpans.

But Paqu?, a prominent advocate of deregulation, is delighted with the opportunity to use Saxony-Anhalt as a platform to show Chancellor Gerhard Schr?der's government how reform can be achieved. Among the measures he is pushing: an across-the-board cut of at least 10% in government subsidies and reform of the state's bloated system of public banks.

In a country where politics is often a lifelong profession -- and outsiders frequently don't fare well -- Paqu?, 46, is an anomaly. He taught economics at Otto von Guericke University in Magdeburg before being elected to the state parliament as a member of the market-oriented Free Democratic Party, which governs in a coalition with the center-right Christian Democratic Union.

Paqu? enjoys the political support of state Prime Minister Wolfgang B?hmer, a Christian Democrat. More important, the public seems to be accepting his reforms. "I think the public is aware that we are in very bad shape and we have to make courageous reforms," says Paqu?. If he is successful in Saxony Anhalt, and his example proves reform can stimulate growth, perhaps there will be hope for Germany after all.


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