Weidmann Successor at Bundesbank Will Be Chosen by Germany’s SPD
German SPD Gets Right to Nominate Next Bundesbank President
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Olaf Scholz’s Social Democrats won the right to nominate the successor to Bundesbank President Jens Weidmann as part of their coalition accord with the Greens and Free Democrats, according to people familiar with the deal.
The SPD, led by the prospective German chancellor and current finance minister, has yet to make a decision on who will fill the role, said the people, who asked not to be identified discussing confidential talks.
The party doesn’t plan to nominate Deputy Finance Minister Joerg Kukies or Joerg Asmussen, a one-time deputy finance minister and former European Central Bank Executive Board member, according to one of the people.
Potential candidates might include Joachim Nagel, a former Bundesbank board member now at the Bank for International Settlements, Isabel Schnabel, a member of the European Central Bank’s Executive Board, and Bundesbank Vice President Claudia Buch.
The post of Bundesbank president will become vacant as of January after the unexpected resignation of Weidmann 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.
On Wednesday, he warned in a speech that upside risks to the inflation outlook clearly dominate. Weidmann cautioned against letting loose monetary policy continue for too long because abrupt an interest-rate increase could then threaten the financial system.
The change in Bundesbank leadership comes at a crucial time, just as the government takes office, resurgent coronavirus infections threaten to shut down activity across the economy, and inflation approaches 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 surge in prices is likely to be.
The future role of the Bundesbank in Europe caused friction during the coalition talks, a person familiar with the coalition talks told Bloomberg earlier this month. While the Free Democrats think it should continue its tradition championing price stability in the euro area, the SPD see that responsibility first and foremost with the ECB itself.
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