This is an unexpected decision, and the consequences of which are potentially considerable for European monetary policy. Jens Weidmann, the president of the German central bank (Bundesbank) announced on Wednesday October 20 that he was resigning at the end of 2021 for personal reasons. He has headed the institution since 2011 and, as such, sits on the Governing Council of the European Central Bank (ECB), which decides on the direction of monetary policy. He is also the voice of the ECB in Germany. “I am convinced that after more than ten years the time has come to open a new chapter, for the Bundesbank as for me personally”, did he declare.
This resignation, which comes at the same time as the end of Angela Merkel’s long term (2005-2021), marks the end of an era. Jens Weidmann, 53, doctor of economics from the University of Bonn, is close to the Chancellor. In 2006, at the start of his mandate, she had appointed him as head of the economic and financial policy department of the chancellery, until spring 2011, when he took over from Axel Weber as head of the Bundesbank. after the latter’s resignation.
During his tenure, Jens Weidmann had the delicate task of defending, within the Governing Council, the traditionally “conservative” conception of the Bundesbank in matters of monetary policy, which is based on the idea that a central bank must be independent. , little interventionist and above all concerned with price stability.
“Long-lasting effects”
This conception has been severely tested by the exceptional crises that marked the decade, when the European Central Bank adopted debt securities buyback programs to support countries in difficulty. So-called “unconventional” instruments, at odds with the classical German position. Long critical of these programs, especially during Mario Draghi’s tenure at the head of the ECB, Jens Weidmann has recently evolved, while remaining more attentive than other governors to the issue of inflation.
“The environment in which we operate has changed massively, he said in his press release Wednesday morning. The financial crisis, the sovereign debt crisis and, more recently, the pandemic have led to political and monetary decisions that will have lasting effects. It has always been important to me that the clear voice of the Bundesbank, focused on stability, remains audible. “
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