What matters when it comes to the Weidmann successor
Political economists – several of whom are already under discussion – would be the wrong choice as Bundesbank boss, comments Anja Ettel
Source: picture alliance / Wolfgang Minich; Claudius plow
Jens Weidmann was the only critic in the Governing Council of the dangerous central bank rate, which brought Europe zero interest rates with high inflation. His successor must not be politically motivated. After all, it is about a great good.
PForecasts down, prices up. In short, this is the picture that economically presents itself in Germany shortly before the new federal government takes office.
While the politicians of the traffic light coalition are still engaged in exploratory talks in order to finally modernize the state, digitize the infrastructure and make the social market economy more ecological, there is something else that concerns citizens in this country that affects them much more directly: the question of how much your money will be worth in the future.
The pandemic-plagued retailers may be pleased that consumers in this country prefer larger purchases now, as the current GfK survey shows. At the same time it is an alarm signal.
Because there are increasing indications that people obviously no longer trust one of the most important promises of the state to its citizens as much as before: that they can have confidence in the purchasing power of their own currency. This is also due to the rapidly increasing inflation rate, which has recently risen to 4.1 percent, and the trend is rising.
The European Central Bank (ECB), as the guardian of the euro, does not tire of emphasizing that the increase is only temporary and is due to the supply chain problems of the pandemic, which have narrowed the range of goods and thus fueled prices.
The people in this country in particular are becoming increasingly frustrated that the zero interest rates of the past crisis years are now accompanied by rising inflation, which is further reducing their wealth.
Someone who believably embodies the promise of money
The fact that the ECB is still sticking to its crisis policy and is apparently even thinking about continuing the existing bond purchase programs beyond acute assistance in order to preserve the legroom that it has cherished in monetary policy – all of this makes many citizens rightly skeptical.
The fact that Bundesbank President Jens Weidmann is now the most determined internal critic to leave the ECB Council – apparently tired of fighting after a decade as a largely lonely admonisher – is extremely bad timing, even if it was not intended that way.
“Not all Germans believe in God, but everyone believes in the Bundesbank,” is how the European statesman Jacques Delors once summed up the almost intimate relationship between Germans and their currency. The Bundesbank has this trust bonus to this day, even if it is no longer directly responsible for local monetary policy.
The government should keep this in mind when deciding on Weidmann’s successor in the coming weeks. The smartest thing that she can do, and actually has to, is to find someone who embodies the promise of money as credibly as Weidmann did from the start.
Political economists – several of whom are already being discussed – would be the wrong choice. What is needed is an independent mind that people trust. Because there is a lot involved: managing the Germans’ money.
“Weidmann was a critical voice in the bodies of the ECB”
FDP leader Christian Lindner has regretted the resignation of Bundesbank President Jens Weidmann. He demands that the Deutsche Bundesbank must continue to advocate a stability-oriented monetary policy in Europe in order to react to inflation risks.
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