Monday, February 14, 2011

No Room for Anti-inflationists at the European Central Bank

From today's Open Europe news summary:

Axel Weber to step down from the Bundesbank at the end of April;
Slovak candidate for ECB board of directors rejected because of her country’s opposition to Greek bail-out

The German government confirmed on Friday that German Bundesbank President Axel Weber will leave his post at the end of April for “personal reasons.” In an interview with Der Spiegel, Weber also explained that he had decided to withdraw his candidacy for European Central Bank President because his “clear position” on issues such as the ECB bond purchases from struggling countries risked putting him on a collision course with some eurozone governments. The front page of Handelsblatt notes that German Finance Minister Wolfgang Schäuble has agreed to give up Germany’s demands for the chairmanship of the ECB, but only under the condition that German Chancellor Angela Merkel successfully pushes ahead with her ideas for an EU economic government with France, something which Weber reportedly opposed.

The frontpage of German magazine Wirtschaftswoche carries the headline, "Axel Weber goes, inflation arrives". The paper warns that "the departure of Axel Weber endangers trust in the stability of the euro." Former German SPD Finance Minister Peer Steinbrück has denied claims that he could replace Weber as Germany’s candidate for the ECB top post. In an interview with Bild, German Economy Minister Rainer Brüderle has suggested that the next ECB President does not necessarily have to be German, provided that they consider price stability as a priority to achieve growth and prosperity.

Meanwhile, FAZ reports that diplomatic sources have confirmed that Belgian Central Bank official Peter Praet will be appointed to the ECB board of directors at the expense of the Slovak candidate, Elena Kohútiková, who may have been rejected because of her country's resistance to the Greek bail-out. De Morgen quotes ECB President Jean-Claude Trichet saying that he "couldn't understand why a country that refused to show solidarity with the Greeks would want a top position at the ECB."

Saturday’s Independent Saturday’s Guardian FT Weekend Handelsblatt BildSpiegel Stern BildBild: Brüderle Bloomberg Le Monde Economist

The German magazine Wirtschaftswoche says it best, "Axel Weber goes, inflation arrives".

In his opposition to anti-inflationist Elena Kohutikova of Slovakia, Jean-Claude Trichet tries to pull a clever sematic trick when he says that opposing inflation is the same as opposing Greek solidarity. It is not. The best thing for the common Greek citizen is for Europe to force the Greek government to live within its means, liberalize its economy, and end corruption. Bailing out the Greek political class with printed Euros, which is a stealth tax on the rest of Europe, can hardly be justified as showing solidarity.

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