A Replacement for Weber Merkel Advisor Weidmann to Take Over Bundesbank
A top adviser to Chancellor Angela Merkel has been chosen to succeed Axel Weber at the head of Germany's central bank. Jens Weidmann is to be handed the job despite concerns from within Merkel's coalition and in the opposition about his proximity to the goverment.
Angela Merkel's chief economic adviser is set to become the new head of the Bundesbank despite disquiet over his close political ties. At 42, Jens Weidmann will be the youngest-ever president of the independent German central bank. The move may well be an indication that the chancellor will not press for a German to be the new president of the European Central Bank (ECB), a post now expected to be filled by Italian central bank governor Mario Draghi.
Merkel was stunned last week when the current Bundesbank chief, Axel Weber, abruptly resigned and pulled out of the running to replace Jean-Claude Trichet as ECB president, a race in which he had been the clear favorite. He highlighted fundamental policy differences for his decision, namely his opposition to the ECB's purchase of government bonds issued by troubled euro-zone members. Merkel was faced with having to replace him at the Bundesbank as well as finding a new German candidate for the ECB job, the latter task looking increasingly difficult.
'Need for Discussion'
Prior to his current position, Weidmann was head of monetary policy at the Bundesbank and is a former student of Weber's. In 2006 he was brought in by Merkel as an economic advisor, and during the financial crisis he belonged to a small circle of top officials who controlled the enormous rescue packages for banks and the economy.
While Weidmann is widely considered a gifted economist, his appointment has already raised concerns, notably over his political ties in a role at the top of a staunchly independent body like the Bundesbank. According to media reports, the chancellor prevailed over the concerns of her junior coalition partner, the business-friendly Free Democrats (FDP). The FDP had indicated their support in principle for Weidmann, but after a meeting between Merkel and party leader Guido Westerwelle, the party noted a "need for discussion."
The opposition Social Democrats have hit out at the appointment. The party's budget spokesman in the Bundestag, Carsten Schneider, told SPIEGEL: "A direct move from the chancellor's office to the head of the Bundesbank would be a heavy burden." Gerhard Schick from the Green party told the business daily Handelsblatt that Weidmann was "responsible for Angela Merkel's economic policy which led to a lost year the the recovery of the euro."
'More of an Advantage'
In an interview with SPIEGEL on Monday, Weber -- who will leave the Bundesbank at the end of April -- called Weidmann "an excellent economist."
"Despite his young age, he has indisputably accumulated a great deal of experience and is an absolute professional," Weber said. "Accusing him of being too close to politics is unjustified. And even if it sounds flippant: The Bundesbank only 'lent' him to the German government. He would carry out his duties well in any position, right from the first day."
Economist and former government adviser Bert Rürup also recommended Weidmann. "Through his work with the Chancellery, Jens Weidmann has learned how political goals are achieved," he said. "It's more of an advantage than a disadvantage in being a successful Bundesbank president."
dsk with wires