November 29, 2011 / 9:04 PM / in 6 years

UPDATE 1-Germany lays claim to ECB's top economics post

* Schaeuble says top German official is best for job

* Post of chief economic adviser one of ECB’s most influential

* French heavyweight Coeure seen as alternative

By John O‘Donnell and Daniel Flynn

BRUSSELS, Nov 29 (Reuters) - Germany made a pitch on Tuesday to have its candidate take the job of chief economic adviser at the European Central Bank, hoping to head off a French contender who some economists see as more qualified for the post.

German Finance Minister Wolfgang Schaeuble said his deputy, Joerg Asmussen, was the ideal candidate to take charge of the ECB’s economic portfolio when he joins the central bank early next year, a job that could be central in shaping the bank’s response to the euro zone’s sovereign debt crisis.

The post of chief economic adviser is one of the most important at the central bank, recommending to the governing council at what level to set interest rates.

“You don’t give up such a good man easily,” Schaeuble told reporters ahead of a meeting of euro zone ministers.

“We take it that he is the best person for the position that Stark had,” Schaeuble said, indicating that he expected Asmussen to fill Juergen Stark’s post as ECB chief economic adviser.

But there appeared to be disquiet in France that Schaeuble was staking a claim to the post for Germany, and Schaeuble and his French counterpart, Francois Baroin, later issued a statement saying they respected the ECB’s independence.

“We trust that (ECB President) Mario Draghi and the executive board will decide what is best for the ECB, in full compliance with its mandate,” they said.

The race to fill the position comes amid a tussle between Paris and Berlin over the ECB’s role in tackling the euro zone crisis, with France wanting more aggressive action in buying national bonds but Germany reluctant for the ECB to do more.

Asmussen could be a formidable force in the role if he were to ally himself with Bundesbank President Jens Weidmann, a hardline opponent of giving the central bank a freer rein in buying bonds.

The two studied together at university under Axel Weber, the previous Bundesbank president and an outspoken opponent of ECB bond buying.

Asmussen is set to take one of two free places on the ECB’s six-member executive board. For the other, France has put forward Benoit Coeure, the chief economist in its treasury, widely regarded as one of the country’s best financial minds.

Unlike previous chief economists Stark and Otmar Issing, Asmussen does not have a doctorate. Were he to get the job as chief economic adviser it would be a departure from having an academic heavyweight in the role.


“It would be a slap in the face for Germany not to get it,” said one official. “It’s an important job because the person is seen as a guardian of stability -- there is a lot of Bundesbank DNA in the ECB.”

While France may covet the influential post, a French treasury official played down ambitions for Coeure, a former economics professor at an elite French university.

“France is making no demands about Benoit’s role at the ECB,” said the official, who declined to be identified. “It’s up to (ECB President) Mario Draghi to choose.”

Coeure is viewed as a monetary policy pragmatist by colleagues.

In the French tradition of central banking, he is believed to regard monetary policy as subservient to the needs of the economy. He is also regarded as being open to more unconventional measures to keep monetary policy channels open.

Schaeuble said Asmussen was well qualified, having worked in the finance ministry in charge of European and international issues.

Stark announced his resignation in September, citing personal reasons, but sources have said his unhappiness over the ECB’s decision to buy government bonds on the secondary market was the real reason for his resignation.

The exit of Italian Lorenzo Bini Smaghi from the executive board marks the loss of another experienced policymaker from the ECB this year, following the departure of Jean-Claude Trichet and Germany’s Axel Weber.

They are being replaced by younger policymakers who have less central bank experience overall, although the newcomers appear to have a somewhat more flexible approach, which some analysts and economists say could make the ECB more pragmatic. (Reporting By John O‘Donnell and Daniel Flynn; additional reporting by Sakari Suoninen in Frankfurt; editing by Rex Merrifield and Ron Askew)

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