Merkel may replace Weber in Bundesbank tradition

LONDON | FRANKFURT: German Chancellor Angela Merkel may stick with tradition and tap someone with Bundesbank experience such as Jens Weidmann or Juergen Stark to run the central bank after Axel Weber’s surprise departure, economists say. Merkel’s office has said she will nominate a Bundesbank president this week to replace Weber when he steps down on April 30.

The search may focus on Weidmann , Merkel’s top economic advisor , and European Central Bank executive board member Stark, according to economists including Citigroup’s Juergen Michels and Holger Schmieding of Berenberg Bank. Merkel and Finance Minister Wolfgang Schaeuble will make an announcement on the post by February 16, Die Welt newspaper reported.

Weber’s exit from the top job at the central bank of Europe’s largest economy may feature in euro-region finance ministers’ discussions at a meeting in Brussels on Monday as the prospects recede of a German securing the ECB presidency after Jean-Claude Trichet’s October departure . Unlike Weber, all previous presidents held senior posts with the Bundesbank, its predecessors , or one of the country’s state central banks. “Merkel hasn’t had much luck with outsiders like Weber,” said Michels, Citigroup’s Londonbased chief euro-area economist. “Certainly Weidmann is on top of the agenda but I also wouldn’t rule out Stark.”

LEADING CANDIDATE

Weidmann, 42, a former head of the German central bank’s monetary policy analysis department, is a leading candidate to replace Weber, Bild newspaper reported on February 9. Weidmann’s closeness to Merkel is unlikely to compromise the Bundesbank’s treasured independence, said Schmieding, London-based chief economist at Berenberg Bank. Germany has a tradition of appointing officials to the Bundesbank , including Karl Otto Poehl and Hans Tietmeyer, and neither had difficulty defending the independence of the Bundesbank,” Schmieding said.

“Both Stark and Weidmann would be excellent candidates.” Poehl, a former finance ministry official, led the Bundesbank from 1980 to 1991. Tietmeyer, an official in the same department, was the bank’s president from 1993 until 1999.