US Nobel laureate slams German ECB hopeful

21st June 2010, Comments 0 comments

Nobel Prize-winning US economist Paul Krugman launched a withering attack on Monday on the head of Germany's central bank, the most likely successor to Jean-Claude Trichet as European Central Bank chief.

Krugman said that appointing Bundesbank boss Axel Weber as head of the Frankfurt-based ECB would be "a risk for the euro" in an interview with German business daily Handelsblatt.

"Weber worries about inflation even when there is no inflation ... if you are looking for someone who targets zero inflation while unemployment rises to 13 percent, then Weber is definitely the right man," Krugman said.

The German is seen as the front-runner to replace Trichet when the latter's term runs out in late 2011 and is well known as a monetary policy "hawk", meaning he favours policies designed to keep inflation as low as possible.

"I would rather see an ECB president who pays more attention to deflationary dangers and to the risk of a long period of stagnation," said the US economist, in comments published in German.

© 2010 AFP

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