(Reuters) – Bundesbank President Jens Weidmann, a relentless critic of the European Central Bank’s ultra-easy monetary policy, will step down from his post on Dec. 31, with more five years left on his term, the German central bank said on Wednesday.
Following are reactions to his resignation:
CARSTEN BRZESKI, HEAD OF GLOBAL MACRO, ING BANK
“This comes at a crucial time for the ECB. The camp of the hawks is losing an important voice – at a time that increasing inflationary pressure seems to have fuelled a more balanced inflation assessment than in the summer.
“Even if board member Philip Lane yesterday reiterated that the ECB’s forward guidance currently did not really justify financial markets’ speculation about future rate hikes, higher inflation (prospects), herd immunity and an economy returning to pre-crisis levels before the end of the year are creating a strong argument to withdraw the ECB’s emergency stimulus and start reducing asset purchases.
“Maybe the decision to do the latter will be Weidmann’s last success as Bundesbank president at the ECB’s December meeting.”
CHRISTINE LAGARDE, EUROPEAN CENTRAL BANK PRESIDENT
“Jens is a good personal friend on whose loyalty I could always count. While Jens had clear views on monetary policy I was always impressed by his search for common ground in the Governing Council, by his empathy for his Eurosystem colleagues, and his willingness to find a compromise.”
CHRISTIAN LINDNER, LEADER OF GERMANY’S FREE DEMOCRACTS
“(Weidmann) stood for stability-oriented monetary policy, whose importance is growing in the face of inflationary risks.”
HOLGER SCHMIEDLING, CHIEF ECONOMIST, BERENBERG
“The new German government will likely appoint a less hawkish successor. Perhaps Isabel Schnabel (currently on the ECB board) or somebody with similar mainstream views.
“Weidmann’s resignation ‘for personal reasons’ may tilt the debate within the ECB a bit more in a dovish direction. But not very much. He is not the only hawk on the ECB council. Also, many mainstream members on the ECB governing council would also be ready to phase out asset purchases earlier and raise rates earlier than current ECB guidance indicates if inflation were to surprise the ECB to the upside.
“Weidmann will still be there when the ECB council decides on 16 December by how much it will scale up the standard APP asset purchases and make them more flexible upon the likely end of – or phasing out of – its pandemic emergency purchases (PEPP) from April 2022 onwards.”
LOUIS HARREAU, EURO ZONE ECONOMIST AND ECB STRATEGIST, CREDIT AGRICOLE, PARIS
“For me, there are two specific events that will leave a negative mark in Jens Weidmann’s legacy: the reaction to the OMT (public opposition, and testimony at the German Constitutional Court. Not only it hurt the programme but it highlighted the dissensions at the ECB, weakening the overall credibility of the ECB. Same in September 2019, when he publicly opposed to the new APP (asset purchase programme).
“Nevertheless, and more importantly, for me Jens Weidmann has had a way more balanced approach than previous German central bankers: he tolerated the APP, he supported the PEPP, and has had overall a ‘constructive’ opposition to the accommodative monetary policy. And the fact that most of the time, he remained constructive, despite his opposition, allowed the ECB to be more proactive and more efficient.”
