German banker: No comment on ECB job

VERONIKA OLEKSYN

Published: Thursday, Feb. 10 2011 9:45 a.m. MST

President of German Central Bank Deutsche Bundesbank , Axel Weber, speaks during a finance and economic forum on Thursday, Feb. 10. 2011 in Vienna. The head of Germany's Bundesbank says he has agreed with Chancellor Angela Merkel not to talk publicly about whether he will seek the European Central Bank's top job. Axel Weber told reporters in Vienna, Austria on Thursday that any decisions regarding his future would be made in "close coordination" with Merkel. Words in background in German read: Prospects of the European Finance and Economic Policy.

Hans Punz, Associated Press

BERLIN — The head of Germany's central bank said Thursday he has agreed with Chancellor Angela Merkel not to talk publicly about whether he will pursue the European Central Bank's top job, for which he has been a leading candidate.

Any decisions regarding his future, including whether he would seek a second term at head of Germany's own central bank, will be made in "close coordination" with Merkel, Axel Weber said in Vienna, following a day of speculation about his future.

"I have assured her that I won't comment on the matter until we can meet for new talks," Weber said. "We will make all necessary decisions in close cooperation."

He refused to elaborate, amid news media speculation that he is withdrawing from consideration as a candidate to lead the ECB, which sets interest rates for the 17 countries that use the shared euro currency. The German government had no comment.

It emerged on Wednesday that Weber had indicated earlier he may not seek a new eight-year-term term at the Bundesbank when his current one expires next year. The government said then that Weber had a confidential phone conversation with Merkel, but refused to give details.

The 53-year-old has been widely viewed as one of the front-runners to replace Jean-Claude Trichet as ECB president when the Frenchman's term expires at the end of October.

The German government hasn't yet officially thrown Weber's hat in the ring as a candidate for the ECB job, noting that Trichet's term only expires in the fall.

Weber is an advocate of tough steps to prevent inflation, in line with the Bundesbank's tradition. He has voiced unease over the ECB's program, launched last year, to buy bonds of troubled eurozone countries and has called for the program to be stopped.

Weber's main rival for the ECB job appears to be the Bank of Italy's governor, Mario Draghi, who has been publicly endorsed by Italian Prime Minister Silvio Berlusconi.

While Draghi is well-regarded, many analysts say his main problem might be his nationality. Italy faces potential debt problems, and the ECB already has a vice president from one such country, Portugal's Vitor Constancio.

After being led by Dutchman Wim Duisenberg and now Trichet, Germany — which is Europe's biggest economy and increasingly its paymaster amid the sovereign debt crisis — is widely viewed as wanting the ECB's top job.

A Weber withdrawal would leave Merkel having to decide whether to find a new candidate who could win support from the eurozone's other 16 member states.

After Weber's brief statement in Vienna, the Bundesbank said Weber had canceled a planned appearance at a Franco-German economic summit on Friday in Berlin.

The meeting of the eurozone's two biggest economies is to be attended by German Finance Minister Wolfgang Schaeuble, his French counterpart Christine Lagarde and Bank of France Governor Christian Noyer.

ING analyst Carsten Brzeski said in a research note earlier Thursday that Weber's stance "can be interpreted in many ways: either as a sign that he is dropping out of the ECB race or as a sign that he would not return as Bundesbank president if a possible ECB candidacy fails."

In Vienna, Weber addressed business leaders and defended the euro as a haven of price stability, even despite a recent uptick in inflation, according to a transcript of his speech.

He said the reforms adopted in the wake of the sovereign crisis would ultimately strengthen the eurozone's financial system, adding that "also in the future, I will be happy about the day-to-day advantages of a common currency on my trips to other European countries."

Oleksyn reported from Vienna.

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