Germany will propose a candidate for the European Central Bank’s executive board after the resignation of Juergen Stark, Finance Minister Wolfgang Schaeuble said today.
“The policy of the European Central Bank, as in the past, will be set in all independence, which we honor and defend, to defend the stability of our common currency and I assume that Germany will present a proposal for the succession of Mr. Stark, which will safeguard this,” Schaeuble told reporters today in Marseille, France, where he is meeting Group of Seven finance officials.
Stark, 63, resigned today, the central bank said in an e-mailed statement. The policy maker expressed strong opposition to the ECB’s bond-buying program, which was expanded last month when the ECB started buying Italian and Spanish bonds, said a euro-area central bank official familiar with the meeting.
The resignation of Stark, the ECB’s chief economist, is a blow to the bank, the official said, noting he is the second German ECB member after former Bundesbank President Axel Weber to leave over the bond program. Weber was replaced by Jens Weidmann, Angela Merkel’s economic advisor at the Chancellery.
“Juergen Stark has worked with great loyalty for the common currency and the European Central Bank,” Schaeuble said. “It wouldn’t be in the interest of his sense of responsibility if we now speculated about the reasons.”
Schaeuble declined to comment on Deputy Finance Minister Joerg Asmussen as a possible replacement.
Germany’s N-TV television reported that the German government will nominate Asmussen, without saying where it got the information. Lars Feld, a member of Merkel’s council of economic advisers, said Asmussen is a “very competent” person capable of replacing Stark.
Asmussen has been a key negotiator at the heart of Merkel’s economic policy since she came to power in 2006. He and Weidmann both studied under Weber, who was a university professor before joining the central bank.
In 2009, as Germany underwent the worst recession in its post-World War II history, opposition parties called on Asmussen to be dismissed, saying he mishandled government efforts to save property lender Hypo Real Estate Holding AG the previous year. Asmussen also sat on the board of IKB Deutsche Industriebank AG when it became the first German victim of the subprime turmoil in 2007.
Stark’s departure, less than two months before President Jean-Claude Trichet’s term ends, suggests policy makers are increasingly split over the best way to fight Europe’s debt crisis.
“I have the impression that Bundesbank President Weidmann stands just as much for the stability of the European currency as the whole government, the chancellor and the finance minister,” said Schaeuble. “The proposal we’ll make will reflect that.”
In April of 2010, when Schaeuble fell ill with a recurring ailment related to his wheelchair use, he sent Asmussen in his place to a meeting of European finance ministers.
By January of this year, as the crisis had spread to Ireland and Portugal, he hinted at an easing of rates on bailout loans in return for a commitment across the euro region to tackle debt and boost competitiveness.
“We can look at this if countries at the same time would be willing to accept a kind of national fiscal framework to be enshrined in their constitution,” he said in an interview in New York.
Eight months on, France, Spain and Italy have all joined Germany in efforts to put legal limits on debt.