Monday, February 14, 2011

No German Wants the ECB Chairman’s Job

Last week, Bundesbank Chairman Axel Weber, 53, publicly declined the job of European Central Bank president—which set off quite the round of tongue wagging.

Axel Weber
The ECB presidency is rotated—at the end of Jean-Claude Trichet’s tenure, it’s Germany’s turn. Weber was the leading candidate—and a famously strict disciplinarian insofar as monetary policy was concerned, in favor of a strong euro and letting the eurozone nations fend for themselves, when it came to sovereign debt.

But he wasn’t the only German to withdraw his name from contention: Peer Steinbrueck, a Social Democrat parliamentarian and former finance minister in Angela Merkel’s cabinet, has also withdrawn his name.

Axel Weber’s explanation for withdrawing was neatly summed up in an interview published today in Der Spiegel:
SPIEGEL: Why don't you want to be president of the ECB?
Weber: My name has been mentioned in the discussion about this position over the last year and a half. I have taken clear positions on a few important decisions in the last 12 months…
SPIEGEL: …especially the ECB's purchase of government bonds issued by troubled euro-zone members, a policy you are skeptical about …
Weber: …and I continue to support these positions. My positions might not always have served to increase my acceptability as an individual with certain governments. For this reason, it's been clear to me since last May that this would adversely affect a potential candidacy. Since then, I have become increasingly convinced that I should not seek this important position.
As to Steinbrueck, his explanation was shorter still: “I am not available for this job.”

A German has to take this job—after all, it’s their turn. The tapped candidate will have to somehow cut the Gordian Knot: Be disciplined with the euro, yet bail out the weaker euro-zone nations. 

Trichet has played that role, more or less managing to please everybody. But as inflation is rising worldwide, saving the euro or saving the sovereign debt will become mutually exclusive. 

So it’s really no surprise that no German wants to get involved in this unfolding mess. 

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