Bundesbank President Jens Weidmann, a relentless critic of the European Central Bank’s ultra easy monetary policy, will step down more than five years early, opening the door for Germany’s new government to pick a less confrontational successor.
Weidmann said he would leave for personal reasons on Dec. 31, just days after the ECB is set to make a crucial decision on winding down pandemic-era stimulus that has revived growth but also pushed inflation to its highest rate in over a decade.
Among the most conservative members of the ECB’s Governing Council, Weidmann often found himself in opposition to fellow policymakers, even challenging the ECB policy tool designed to back then-president Mario Draghi’s 2012 pledge to do “whatever it takes” to save the euro.
Even as he announced his departure, the third successive Bundesbank president to quit early, Weidmann warned about inflation risks. “It will be crucial not to look one-sidedly at deflationary risks, but not to lose sight of prospective inflationary dangers either,” he said in a message to staff.
The successor to Weidmann, a former economic advisor to Chancellor Angela Merkel, will be picked by the new German government, likely to be a left-leaning coalition led by current finance minister Olaf Scholz.
The change in government may also mean easier fiscal policy in the coming years, suggesting that the fiscally conservative Weidmann could also find himself in more frequent opposition to his own government.
Highlighting the personal nature of Weidmann’s resignation, he informed ECB President Christine Lagarde and Scholz only on Wednesday morning, shortly before the public announcement.
ECB-watchers said potential Bundesbank chiefs include Claudia Buch, now Weidmann’s deputy, economists Volker Wieland, Marcel Fratzscher, Lars Feld, Lars-Hendrik Röller and Jakob von Weizsäcker, and current Bundesbank chief economist Jens Ulbrich.
Isabel Schnabel, an ECB board member, is also a potential successor, although she would need to quit her current role, which some argue is a higher-profile job.
None of the euro zone’s 19 national central banks is led by a woman and Scholz’s SPD and the Greens, both likely to be part of the next ruling coalition, have advocated improved gender balance in government.
“Isabel Schnabel is doing a fabulous job at the ECB but I could think of no one better than Schnabel to lead the Bundesbank at this juncture,” UniCredit economist Erik Nielsen said. “Perfect background and experience, and outstanding European and global respect.”
