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At the start, Robert Habeck congratulated Jens Weidmann on his great commitment. But it only lasted a few sentences before the leader of the Greens and candidate for the post of Federal Minister of Finance spoke of “fundamental differences” with the President of the Bundesbank. On Wednesday, he announced his resignation six years before the end of the contract and thus unwittingly opened the door for a turnaround in German monetary policy.
And that Habeck really wants a U-turn can be seen in the stunt he followed: “For the future, we need a Bundesbank that can meet the challenges of the times. “
While the SPD and the Greens tend to continue the lax monetary policy of recent years, the FDP insists on a return to regulatory principles – a position Weidmann defends like no other. His successor is therefore a highly political issue which should now also be part of poker and post-bargaining in coalition negotiations.
FDP as the guardian of stability
The FDP presents itself as a supporter of the hard line. Jens Weidmann was a strong central bank chief who criticized “the growing politicization of central banks” as much as ultra-accommodative monetary policy, said liberal financial politician Florian Toncar. “I would like to see some continuity in the future. The head of the FDP, Christian Lindner, had already called Wednesday: “The Deutsche Bundesbank must continue to advocate a monetary policy focused on stability in Europe. The CDU also called on Thursday on the sidelines, Weidmann’s successor must work with the same determination for monetary stability.
In fact, these are the very big issues that Weidmann is even more pressing with his resignation. Because the question of the role that central banks should play in the future will be redefined in the coming months. Basically, it is a question of: Will monetary stability remain the sole function of monetary surveillance or will this narrow task be weakened and extended to the indirect financing of major political projects?
The latter would also mean that issues of inflation, debt and dedicated monetary policy, for example for climate projects, would be viewed less critically. The financial concept of the Greens, for example, distinguishes between good and bad debt. The debt brake should therefore only apply to bad debts. Good debt – investments which the Greens believe create new value – should, however, be exempt. A point of view with which Weidmann would certainly disagree.
The positions of potential successors: inside
His potential successors: inside maybe already. Marcell Fratzscher, president of the German Institute for Economic Research (DIW), has long supported debt brake reform and called on the European Central Bank (ECB) to expand its PEPP bond purchase program . Most recently, he called inflation his “least concern”.
Isabel Schnabel, currently a member of the ECB’s executive board, is also listed for the top position. She is also a strong advocate of accommodative monetary policy and has repeatedly warned against fear-mongering tactics associated with rising inflation numbers. And Scholz confidant Jörg Kukies, still Minister of State at the Federal Ministry of Finance and also under discussion, should not stand in the way of a new monetary policy. Among the names circulating as successor, only economics Volker Wieland and the current deputy head of the Bundesbank, Claudia Buch, represent Weidmannian stability.
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