Axel Weber and the search for an ECB successor | Business| Economy and finance news from a German perspective | DW | 10.02.2011
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Axel Weber and the search for an ECB successor

Reports that Axel Weber might not continue at the helm of Germany's central bank, the Bundesbank, have triggered speculation over who will take over as head of the European Central Bank (ECB) later this year.

A large Euro sign in front of a skyscraper

What the future holds for the ECB is written in the stars

Until this week, the Bundesbank president had been widely tipped as a frontrunner to take over the leadership of the ECB when Jean-Claude Trichet steps down later this year. But that image of the future was shattered on Wednesday when sources at Germany's central bank revealed that Axel Weber might not "necessarily (seek) a second term."

In walking away from the Bundesbank, Weber would also be walking away from his chance to run for presidency of the ECB. That suggestion has led to excited speculation about his motives - whether he plans to step into the private sector to head up Deutsche Bank - and who is now most likely to slip into Trichet's shoes when his tenure expires at the end of October.

While media commentators are vocal on all three issues, the man at the center of it all is holding his cards close to his chest. Ahead of an address to the German Chamber of Commerce in Vienna on Thursday, Weber said he was not willing to discuss the future of his career until after he's spoken with Chancellor Angela Merkel.

"I promised the chancellor I would only comment after meeting her and coming to a decision with her," Weber said, without giving any indication of when that might be and therefore leaving the field wide open for further conjecture.

Commercial future?

Angela Merkel and Axel Weber

Tensions between Merkel and Weber have been building

On the issue of why Weber has chosen to turn away from the Bundesbank and dash his shot at one of the most influential jobs in international finance, the two words which are being bandied about with the greatest vigor are "Deutsche Bank".

The company's current chief executive, Josef Ackermann, is due to leave his post in 2013, and he recently confirmed that the bank had launched a search for his successor. There are a number of contenders on the list already, but Ansgar Belke, Professor of Macroeconomics with the University of Duisburg, told Deutsche Welle that Weber would be a plausible addition.

"The candidates all have some disadvantages, which speaks in favor of Weber following on from Ackermann," Belke said. "But as he cannot be certain that he will become the successor, I am surprised to see him give up his position at the Bundesbank and the opportunity to head the ECB."

Inadequate support

Although Belke stresses that all he can do is speculate, he says Weber's decision might have been influenced by a lack of endorsement from Angela Merkel, who witnessed him ruffling feathers - most notably those of French President Nicolas Sarkozy - last year when he criticized the ECB's decision to buy bonds from Greece and other heavily indebted states to stabilize the eurozone.

His statements at that time cast several question marks over his suitability to lead the body which is the chief guardian of the euro, particularly at a time when Europe is still trying to defuse its debt crisis.

European Central Bank President Jean-Claude Trichet

European Central Bank President Jean-Claude Trichet

"Maybe he was depressed at not receiving sufficient support," Belke suggested. "But also, from what I have seen in the past, he has never held jobs for a decade, he has moved from one to another, even when he was an academic, so perhaps he just has an inclination to be flexible."

Whether Weber's decision to leave Germany's central bank can ultimately be traced back to itchy feet, damaged pride or the prospect of a more enticing offer from the private banking sector, will no doubt become apparent in the near future. But whatever the answer, it will not alter the fact that the ECB is now looking at an altered pool of candidates for its most coveted post.

A fresh race

Names that have been mentioned include Nout Wellink, the chairman of the Dutch Central Bank; Luxembourg's Yves Mersch, who was endorsed by Germany's former chancellor Gerhard Schröder and is therefore not likely to receive the same honors from Merkel; Erkki Liikanen of Finland; and Italian central bank head Mario Draghi.

Of those, many analysts consider Draghi to be the best qualified, but Marco Valli, chief eurozone economist, told Reuters news agency that his main problem was his nationality. "With the debt crisis still far from being solved, it is not easy to see the ECB steering so clearly towards the periphery," he said.

Black clouds over the government quarter in Berlin

Does a Weber departure mean bad news for Berlin?

The two German names on the list are European Financial Stability Facility chief Klaus Regling, who has already indicated that he is not looking to change jobs, and current ECB executive board member Jürgen Stark.

Speaking in reference to Trichet's impending departure from the ECB, German government spokesman Steffen Seibert told reporters that Berlin wanted a "strong candidate" to replace him, and that that person could be a German.

Not all bad for Berlin

But Michael Schröder of the Center for European Economic Research in Mannheim told Deutsche Welle that he can't imagine Berlin presenting another candidate at this stage.

"Of course I can't rule it out, but I think it is unlikely. The candidate would need to be someone who had played an important role in a central bank and that was Weber," he said, adding that he would have liked to see the Bundesbank president assume the top job at the ECB.

Ansgar Belke, however, believes there could be a silver lining in what currently looks like a black cloud over Berlin, and that it wouldn't matter whether the Finnish, Dutch or Luxembourg candidates were chosen for the job because they share the same policy stance as Axel Weber.

"They would all support price stability orientation, and there would still be the same number of hawks on the bank's council which would make it easier to push through Merkel's plans for a European economic government," he said. "Everyone says support for the German position is diminishing, so we have to go for compromise. This is a compromise, but not a loss."

Reporter: Tamsin Walker
Editor: Sam Edmonds

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