Reuters/Marseille


Asmussen, ‘an excellent choice for the ECB board
Germany has proposed Deputy Finance Minister Joerg Asmussen to replace Juergen Stark on the European Central Bank’s executive board, Finance Minister Wolfgang Schaeuble said yesterday.
Stark, the top German at the ECB, announced on Friday he would quit early in what sources said was a protest against the ECB’s policy of buying bonds to help troubled eurozone debtor states.
“The German government has told Eurogroup head Juncker that it proposes Asmussen to succeed Juergen Stark,” Schaeuble told a news conference at Group of Eight talks in the French port of Marseille, with Asmussen standing alongside.
Sources had said on Friday that Asmussen could be named to replace Stark – whose resignation revealed a deep split at the ECB over its bond-buying activities – a choice that looked set to meet little opposition.
Jean-Claude Juncker, who chairs the Eurogroup of eurozone finance ministers, said Asmussen would be an excellent choice for the ECB board.
“The euro cannot be saved by one person but he would be without a doubt the right person,” Juncker told reporters in Marseille.
Asmussen, who has been a key figure in Germany’s policy response to the eurozone debt crisis, said he was ready to accept the challenged of securing economic stability in the eurozone.
Asked if he had been taken by surprise at Stark’s decision, Schaeuble said: “We weren’t surprised by his decision. But unfortunately because of the independence of the ECB our attempts to dissuade him failed.”
G8 finance officials met a day after Group of Seven finance chiefs in Marseille pledged a coordinated response to the faltering global economic recovery but offered few specifics to appease shaky financial markets.
A respected economist who studied under former Bundesbank chief Axel Weber, Asmussen has moved rapidly up the career ladder at the German finance ministry, moving from junior advisor in 1996 to deputy finance minister just 12 years later.
Asmussen is a Social Democrat but was kept by German Chancellor Angela Merkel’s conservatives after the last federal election due to the experience he had gained in fighting the financial crisis.
Bert Ruerup, former head of the ‘wisemen’ council of economic advisers to the German government said Asmussen would be more pragmatic than Stark.
A eurozone central bank source said on Friday that Stark was angry at being passed over when Weber quit the German central bank earlier this year, clearly also unhappy with the ECB bond-buying programme.
The ECB has faced sharp criticism in Germany for buying bonds – a move many see as taking the bank into the fiscal arena and threatening its core role of fighting inflation.
Meanwhile, Germans expressed shock and dread about the direction of eurozone policy yesterday after Stark’s resignation, which is also a major blow to Merkel, who has been deserted by several top allies and this month faces a vote on expanding the eurozone bailout fund which could even cost her job.
“The end of the ECB as we knew it,” a headline in the Financial Times Deutschland stated baldly. “Now it is over once and for all. The phase in the history of the ECB which was moulded by the Bundesbank,” wrote commentator Wolfgang Proissl.
Germans, whose sacred Bundesbank was a model for the ECB and whose strong economy has underpinned the eurozone since it was created, fear they have lost the argument for stability to southern nations, who they view as financially irresponsible.
“It is a position that all the Germans have. This is a sign of huge problems within the central bank. The Germans clearly have a problem with the direction of the ECB.” said Manfred Neumann, emeritus economics professor at Bonn University and former thesis adviser to Bundesbank chief Jens Weidmann.