Bundesbank Chief Shortlist Down to Nagel, Schnabel, Two Others

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Olaf Scholz’s Social Democrats have narrowed their shortlist on who to name as Bundesbank president to four candidates including Joachim Nagel and Isabel Schnabel, according to a person familiar with the party’s thinking.

The SPD, who won the right to nominate the successor to Jens Weidmann as part of the coalition deal, are set to discuss the choice toward the end of the week with their governing partners, the Greens and Free Democrats, said the person, who asked not to be identified discussing confidential talks.

Nagel is a former Bundesbank board member now at the Bank for International Settlements, while Schnabel is a member of the European Central Bank’s Executive Board and hasn’t worked at Germany’s central bank. Deputy Finance Minister Joerg Kukies and Jakob von Weizsaecker, Scholz’s chief economist at the German finance ministry, aren’t on the list, according to the person. 

The post of Bundesbank president will become vacant as of January after Weidmann’s unexpected resignation last month. During his decade in the role, he was frequently at the center of opposition to the ECB’s ultra-loose policies and crisis aid, though more recently he supported most of its response to the pandemic.

The change in Bundesbank leadership comes at a crucial time, with a new government taking office and resurgent coronavirus infections threatening to shut down activity across the economy. Inflation just hit 6% in Germany, where citizens are notoriously averse to rising prices. 

Weidmann will still be Bundesbank chief at the ECB’s all-important decision in December about the future of stimulus after its 1.85 trillion-euro ($2.1 trillion) bond-buying program expires in March. Whoever replaces him will then handle the aftermath as policy makers continue to gauge how transitory the current inflation spike will be. 

The future role of the Bundesbank in Europe caused friction during the coalition talks, a person familiar with the negotiations told Bloomberg earlier this month. While the FDP thinks it should continue its tradition championing price stability in the euro area, the SPD sees that responsibility first and foremost with the ECB itself.

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