Joerg Asmussen is to leave the European Central Bank’s Executive Board for a government position, depriving President Mario Draghi of a key German ally.
Asmussen, 47, will become deputy labor minister in German Chancellor Angela Merkel’s government and will shortly resign from his post at the ECB, he said in a statement distributed by the Frankfurt-based institution yesterday. Asmussen has been on the six-person Executive Board, which implements monetary policy for the euro area, since January 2012. His term was scheduled to run until 2019.
Asmussen has been a crucial link to Germany for the ECB, criss-crossing the nation to explain what the central bank can and can’t do to ease the euro area’s debt crisis. Bundesbank President Jens Weidmann, the second German representative on the decision-making Governing Council, has been an outspoken critic of some policies including the bond-buying plan dubbed Outright Monetary Transactions.
“Asmussen’s network into the German government will surely be missed,” said Carsten Brzeski, senior economist at ING Groep NV in Brussels. “He wasn’t afraid to represent the ECB’s view toward the German media. He acted as a counterweight and convincingly defended the ECB’s line of argument.”
Weidmann and Asmussen gave opposing evidence to the German Constitutional Court this year in a hearing to determine the legality of the OMT program. While Weidmann argued that bond markets exert discipline on countries’ finances, Asmussen said the euro area faced break-up last year as investors began to price in an end to the currency.
Asmussen’s early departure from the ECB follows that of Bundesbank President Axel Weber in February 2011 and board member Juergen Stark in September that year. It opens Germany up to criticism that its representatives don’t honor their appointments, which won’t make it easier for the country to push through its own candidate for Asmussen’s successor or to win the ECB presidency at some point.
Other nations may push for a place on the board. Germany, France and Italy, the region’s biggest economies, have always had a representative. Spain, the fourth-largest, gave up its seat when Jose Manuel Gonzalez-Paramo left in May 2012.
“I did not take this decision lightly,” Asmussen said in the statement. “The reasons behind this decision are purely of a private nature. The seat of the ECB in Frankfurt with my family with my two very young children in Berlin were not compatible over the long term.”
Merkel told reporters in Berlin that she is “pleased that Mr. Asmussen is again putting his experience at the disposal of the coalition.” Asmussen, a University of Bonn-trained economist, worked in the finance ministry from 1996 to 2011.
Draghi said in an ECB statement that Asmussen “has been a tremendous help in shaping the monetary policy in the past two years while successfully addressing many other challenges” and that he will “personally miss him.”
Jeroen Dijsselbloem, who chairs the group of euro-area finance ministers, will now have to ask for nominations for Asmussen’s successor, just over a year after the last change to the board.
The need for a new member may renew calls for a female candidate. When Yves Mersch joined in November 2012, he overcame the longest battle over an appointment in the euro’s history as the European Parliament pushed for the position to be given to a woman.
German Finance Minister Wolfgang Schaeuble indicated that Bundesbank Vice President Sabine Lautenschlaeger may be nominated to succeed Asmussen. “One of the duties at the ECB is now to build up banking supervision, and that’s where she has a lot of experience,” he said today in a radio interview with Deutschlandfunk.
A Bundesbank spokesman declined to comment earlier on whether Lautenschlaeger would be a candidate.
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