Germany should push Weidmann as ECB chief, Nowotny tells paper
Germany should push Bundesbank chief Jens Weidmann as a successor to European Central Bank President Mario Draghi and the government is making a grave mistake in not pushing harder, ECB policymaker Ewald Nowotny said on Thursday.
Draghi’s job will become available at the end of next October. By that time Nowotny – the head of the Austrian National Bank and a moderate policy hawk who has often sided with Weidmann – will have left his post too.
“I would have welcomed a candidacy of Weidmann very much,” Nowotny told the Oberoesterreichische Nachrichten newspaper.” I personally believe it is a grave political mistake by (German Chancellor) Angela Merkel that she is no longer pursuing Weidmann’s candidacy further.”
Bank of France Governor Francois Villeroy de Galhau is now considered the frontrunner in the race but no real discussion is likely until after the European Parliament elections next spring, when the ECB job is expected to be decided in a package that also includes the heads of the EU Commission and Council.
Despite the political sensitivity of the race, Weidmann has been outspoken in criticising the fiscal plans of Italy, the euro zone’s third biggest economy. He said on Wednesday that monetary policy normalisation will place an increasing burden on highly indebted countries so there is no place for leniency with Rome on European fiscal rules. [nF9N1U500N]
His repeated spats with Italy over fiscal prudence has irritated political circles in Rome, making opposition to Weidmann’s candidacy almost certain.
Weidmann, a top notch economist, has also come under fire for his persistent opposition to the ECB’s 2.6 trillion euro asset purchase programme.
Unveiled during a period of crisis, the programme is credited with reviving growth, and some argue that Weidmann would struggle to unite the Governing Council after having opposed its hallmark policy programme for so long.
“It would be good if someone from the biggest economy in the euro area stood at the top of the ECB,” Nowotny told the paper, adding that an ECB president needs political sensitivity and practical experience as well as being a good economist.
Source: Reuters (Reporting by Francois Murphy and Alexandra Schwarz-Goerlich; Editing by Balazs Koranyi)