After indicating earlier in the week that he did not want to be considered for the post of the president of the European Central Bank (ECB), Axel Weber announced on Friday that he is resigning his post as Bundesbank President. Mr. Weber was considered the top candidate to replace ECB President Jean-Claude Trichet, whose term ends in October. The resignation is a political blow for Chancellor Angela Merkel who wanted a German to be the next head of the ECB as a signal to investors that the ECB was committed to conservative fiscal policies and as a way of assuring German voters and lawmakers that the euro will remain stable. Other European countries may be pleased that Germany no longer has a strong candidate for the ECB position because recently Germany has increasingly attempted to wield its political and economic clout within the European Union (EU) to pressure countries to become “more like Germany” and restrained in their spending. The lack of a clear consensus on who should fill Mr. Trichet’s position may complicate Europe’s search for a way out of its debt crisis and hinder the ECB in its attempts to keep the crisis from further impacting Spain or Portugal. The nationality of the next ECB president may complicate the search for Mr. Trichet’s replacement, as there may be less support for a candidate from one of the countries at the heart of the debt crisis, regardless of the person’s professional qualifications.
QUESTIONS FOR DISCUSSION:
- How will Mr. Weber’s abrupt resignation from the Bundesbank likely impact plans for the EU on how to address the euro-zone crisis?
- Mario Draghi, Italy’s chief central banker, was widely seen as Mr. Weber’s main rival for the ECB post. How will Mr. Draghi’s nationality impact his chances of replacing Mr. Trichet?
- Mr. Weber mentioned that it might have been difficult for him to lead the ECB and work with the other euro-zone central bankers who objected his to hard-line views about dealing the euro-zone crisis, in particular his vocal opposition to the ECB buying the government debt of the euro-zone countries in crisis. Is the fact that Mr. Weber has removed himself from consideration for the post of ECB president in the long-term best interests of the EU?
SOURCE: Walker, M., & Galloni, A. (2011, February 12). Germany’s central bank chief resigns. Wall Street Journal, p. A13. (Retrievable online at: http://online.wsj.com/article/SB10001424052748703786804576138154286387320.html)
Related video clip: Weber’s Bundesbank resignation opens up ECB race. (Retrievable online at: http://www.euronews.net/2011/02/11/weber-s-bundesbank-resignation-opens-up-ecb-race/)