ECB's Weber says European opposition behind withdrawal

BERLIN Sat Feb 12, 2011 7:57am EST

President of Germany's Bundesbank Axel Weber speaks during a panel discussion at an economic leadership congress organised by the newspaper 'Sueddeutsche Zeitung' in Berlin November 25, 2010. REUTERS/Thomas Peter

President of Germany's Bundesbank Axel Weber speaks during a panel discussion at an economic leadership congress organised by the newspaper 'Sueddeutsche Zeitung' in Berlin November 25, 2010.

Credit: Reuters/Thomas Peter

BERLIN (Reuters) - Bundesbank president Axel Weber confirmed on Saturday he would not be a candidate to head the European Central Bank, blaming resistance in some European countries to his hardline monetarist stance.

He also pointed to Jens Weidmann, an economic adviser to Chancellor Angela Merkel, as a leading candidate to replace him at the helm of the Bundesbank when he steps down from the German central bank in April.

In an interview with Der Spiegel magazine released on Saturday, Weber said he feared the credibility of the ECB presidency would have suffered if as president he held a minority view on key questions, pointing to his "clear position" in the last year on important decisions.

"These positions might not have always been helpful for my acceptance in some governments," Weber said, referring to his criticism in May of the ECB's decision to buy bonds as part of a concerted push to try to resolve the euro zone's debt crisis.

The German government announced on Friday that Weber would step down as head of the Bundesbank a year before his term ends, formally ending his chances of becoming the next ECB president. The interview was Weber's first comment publicly since.

Weber said the bonds programme carried significant risks and his call for the ECB to end it earned a public rebuke from Trichet just as the debate was starting about who should be the next ECB president.

"So since May I was aware that a potential candidacy would be damaged," Weber told Der Spiegel. "My decision grew during this time not to aspire for this important office."

Weber said he sent signals to the German government in the autumn that he had other options and had spoken with Chancellor Angela Merkel about it in January. Since January his decision not to be a candidate had grown firmer, he said.

INFLATION FIGHT

The 53-year old, an inflation-fighting monetary "hawk," was widely seen as the frontrunner to replace Trichet when his term ends in October.

His withdrawal has thrown the ECB race wide open and fed unease in financial markets about the ability of divided European policymakers to solve the euro zone's sovereign debt crisis.

The ECB has played a crucial role in responding to the crisis, buying the bonds of debt-stricken peripheral euro zone countries as part of a concerted push to calm markets.

Analysts also wonder if whoever is appointed instead of Weber will take as tough a line on fighting inflation and other policy issues as the Bundesbank chief.

Weber told Der Spiegel that, despite his criticism of that decision, he had the same view as Trichet and other ECB board members "on most issues." He said there was no fundamental dissent in the ECB.

"The ECB is the bulwark of stability in Europe," Weber said. "This young institution proved that impressively in the recent crisis. The president has a special role. However, if he has a minority position in important questions, then the credibility of this office suffers."

Weber said he has no immediate plans to take a post at a commercial bank and he would not take a new job before 2012.

He went out of his way to praise Merkel economic adviser Weidmann as a leading candidate to replace him at the Bundesbank, saying the central bank would have younger leaders. Weidmann is 42.

"We need a signal of rejuvenation," Weber said. "Political leaders often saw the Bundesbank as an institution for (political) party balance. We need board members who've got international expertise."

He added: "Weidmann is an excellent economist. Despite being young, he's got a lot of experience and is a top professional. It's not fair to put him close to political leaders. He is actually on loan from the Bundesbank to the government."

(Reporting by Erik Kirschbaum; editing by Patrick Graham)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.