Weber Said to Step Down From Germany's Bundesbank, Ruling Out ECB Top Job
Bundesbank President Axel Weber plans to step down later this year, a decision that would rule him out of the race to succeed Jean-Claude Trichet as head of the European Central Bank, said a person who spoke to Weber today.
Weber may leave his job about a year before his Bundesbank term expires in April 2012, said the person, who spoke on condition of anonymity. The German central bank head discussed his plans with Chancellor Angela Merkel today, the person said.
Weber’s resignation would open the field to replace Trichet and head the world’s second most powerful central bank. European Union leaders need to appoint a new ECB chief by the time Trichet’s term expires on Oct. 31 and economists had named Weber as a leading candidate to succeed him.
“It does sort of blow the race wide open and will no doubt result in a number of alternative candidates which wouldn’t otherwise have necessarily entered into people’s thinking,” said Nick Matthews, an economist at Royal Bank of Scotland Group Plc in London. “At this stage it’s more likely that it would still be a German candidate.”
Reuters earlier reported that Weber was pulling out of the running, pushing the euro down half a cent to $1.3611. The currency later recovered and traded at $1.3709 as of 5:41 p.m. in Frankfurt. Jens Weidmann, Merkel’s top economic advisor, may replace Weber at the Bundesbank, Bild newspaper said, citing unnamed government and central bank officials. A Bundesbank spokesman declined to comment.
Weber, 53, may be bombarded with questions about his future tomorrow when he speaks at a German-Austrian economic forum in Vienna.
Weber, who is married and has two children of high school and university age, just this week talked about the workload of being a top central banker. On Feb. 7 he told an audience in Tallinn, Estonia that the financial crisis meant “working days become longer and weekends are no longer weekends.” He said “I never dreamed I would be a policy maker myself.”
“I’ll give you an answer when I’m an academic again,” he said.
Some economists are already considering alternative possibilities, including Italy’s Mario Draghi, Erkki Liikanen of Finland, Luxembourg’s Yves Mersch and Nout Wellink of the Netherlands. Germany’s Klaus Regling, head of Europe’s bailout fund, has also been mentioned. Asked about his ECB ambitions, Regling today said he already has a “great job.”
“Draghi would be the best candidate but I doubt there will be convergence on his name because it’ll steer the ECB too much to southern Europe,” said Marco Valli, chief euro-area economist at UniCredit Global Research in Milan. “In any case, the ECB will remain committed to price stability.”
Weber could be trying to force Merkel into coming out into the open and back his candidacy, said Holger Sandte, chief European economist at WestLB AG in Dusseldorf. Merkel has yet to publicly support him, though Bild reported last month that she was getting ready to do so.
“I could imagine that Weber wants to pressure the government to decide on its position on Trichet’s succession,” said Sandte.
EU history is littered with favorites who ultimately failed to get the top job, from failed bids to run the European Commission by Belgium’s Jean-Luc Dehaene in 1994 and Guy Verhofstadt in 2004 to Tony Blair’s campaign to be the first EU president in 2009.
“The markets will have to live with the suspense,” said Jens Sondergaard, chief European economist at Nomura in London. “We’ll probably only know who it’s going to be when the new president is standing at the podium.”
Weber, who has headed the Bundesbank since 2004, emerged as the ECB frontrunner even after breaking from European policy- making consensus by opposing the central bank’s bond-buying program. Such opposition to a main plank of Europe’s crisis- fighting campaign fanned speculation he may not win the support of some EU leaders and lacked the ability to forge consensus on the ECB’s 23-member Governing Council.
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