Merkel aide Weidmann next German central bank chief: source

16th February 2011, Comments 0 comments

Jens Weidmann, 42, a close aide to Chancellor Angela Merkel, was named Wednesday as the next head of Germany's central bank, a source said, after Axel Weber dramatically resigned last week.

Asked if Berlin had decided on Weidmann as the next head of the powerful German Bundesbank, a government source replied: "Yes."

While Weidmann will be ready to step into Weber's shoes in Frankfurt, the German government has no real candidate to propose as next head of the European Central Bank to replace Frenchman Jean-Claude Trichet in October.

Weber was the front-runner for the ECB post and his resignation opened the field up to several others interested in running the world's second most powerful central bank after the US Federal Reserve.

Weidmann will assume Weber's seat on the ECB governing council as head of the Bundesbank.

At the Bundesbank, Weidmann will have to demonstrate he is his own man and not beholden to Chancellor Angela Merkel, for whom he became an important influence over over the past four years.

Barclays Capital economist Thorsten Polleit told AFP: "Eyebrows might be raised" at the path leading straight from Merkel's office to Frankfurt.

Some politicians were also uneasy, with a leader of the opposition Social Democratic Party saying before the appointment that it would "undermine confidence in the Bundesbank's independence."

That is an extremely important quality of the central bank in the eyes of most Germans who have not forgotten bitter lessons brought on by hyper-inflation in the 1920s.

"Can a man who has executed the wishes of the chancellor for five years put up a credible fight against inflation and attempts to influence the European Central Bank, even against his own government," the Financial Times Deutschland said in discussing the expected appointment earlier.

Even the liberal Free Democratic Party (FDP) found the nomination "problematic" according to its expert on financial affairs, Frank Schaeffler.

Such a nomination is not without precedent however. One of the most respected Bundesbank presidents, Hans Tietmeyer, was a junior finance minister and an advisor to former chancellor Helmut Kohl.

While he was the central bank chief, Tietmeyer orchestrated the euro's introduction in Germany.

© 2011 AFP

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