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Berlin, Bundesbank on collision course over Welteke

8 April 2004

FRANKFURT – Germany’s central bank was tight-lipped Thursday in the face of an outright demand by the government that Bundesbank president Ernst Welteke must resign in the wake of a scandal over his stay at a luxury hotel paid for by a private bank.

A Bundesbank spokesman issued a terse “no comment” on the demand made late Wednesday by Berlin after the central bank’s own executive board only announced that Welteke would be temporarily stepping aside from his duties while the matter is clarified.

Late Wednesday, in a 4-3 vote, the German central bank’s executive board elected to replace him temporarily with his deputy, Juergen Stark.

Welteke said he was relinquishing his duties in the best interests of Germany’s central bank.

But he also maintained he had done nothing punishable by law by agreeing to be the guest of Dresdner Bank at Berlin’s posh Adlon Hotel during the New Year’s Celebrations 2001/2002 marking the introduction of the European single currency on 1 January 2002.

However, the federal Finance Ministry issued a statement late Wednesday saying the Bundesbank had not gone far enough.

“We expect this matter to be clarified immediately,” the statement said.

In Berlin, the government of Chancellor Gerhard Schroeder brought pressure to bear, hinting strongly that it was prepared to nominate a successor at any time the Bundesbank board saw fit to “clarify matters for once and for all”.

Welteke has been under pressure since the story broke at the weekend that he and several members of his family had stayed in suites at the Adlon Hotel in a bill that came to nearly EUR 7,700.

Frankfurt prosecutors have launched an investigation into Welteke on suspicion that he had unlawfully accepted an advantage in connection with the hotel stay. Prosecutors were also investigating Dresdner Bank on suspicion of “granting advantages”.



Subject: German News