The announcement of its departure also occurs when Germany is preparing to turn the page Angela Merkel, to which the career of this central banker was linked, which incarnated the obsession of the country for the fight against inflation.
Le Monde with AFP
This is a start in full uncertainty for the future of European monetary policy. The influential President of the German Bundesbank, Jens Weidmann, figure of monetary orthodoxy, announced Wednesday 20 October that he would leave office at the end of the year, after ten years at the head of the institution.
“I have come to the conclusion that after more than ten years is the right time to open a new chapter – for the Bundesbank, but also for me personally”, writes the President of the “Buba” in a letter to the employees of the institution.
During his mandate at the Bundesbank, which was to be completed only in 2027, Mr. Weidmann could not prevent Germany’s loss of influence on monetary policy at the scale of the Euro zone by the European Central Bank (ECB).
The announcement of its departure also occurs when Germany is preparing to turn the page Angela Merkel, to which the career of this central banker was linked, which incarnated the obsession of the country for the fight against Inflation.
Tighten the credit screw
The a long time shown Mr. Weidmann against the Cape Expansionist taken by the ECB under the former president, Mario Draghi, are still felt in his letter of departure. In the future, it will be “crucial (…) not to consider only the risk of deflation, but also not to lose sight of the risks of potential inflation”, which suggest a more restrictive monetary policy, written in his mail.
m. Weidmann has already been calling for the ECB for several months for the credit to tighten the credit screw after deploying an exceptional arsenal of support against the coronavirus crisis.
It is also worried about a sustainable thrust of inflation in the euro zone that the institution of Christine Lagarde judges for the moment temporary. It pleads in its mail so that “monetary policy respects its close mandate and does not be entrants by fiscal policy or markets”.
The president of the ECB, Christine Lagarde, “respect” but “regrets as a lot” the departure of Mr. Weidmann, she said in a statement from the institution. The French rents the “willingness to find a compromise” at the German banker, who has recently expressed when the ECB debated and adopted a new strategy.
The German President, Frank-Walter Steinmeier, must still endorse Mr. Weidmann’s request to be removed from his duties. His or her replacement will be designated after agreement within the German Government.
The surprise announcement occurs in full discussions between the three parties that have won the last legislative elections in Germany, the Social Democratic Party (SPD), the Greens and the Liberal-Democrat Party (FDP), in sight to form a new government that could be more flexible on monetary and budget policy issues.