German Central Bank President with Hawkish Stance Abruptly Resigns Before Term Ends

Opposing ECB's Monetary Easing Policy
Resignation Ahead of Germany's Next Government Formation

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] Jens Weidmann, President of the German central bank Bundesbank, is suddenly resigning with five years left in his term.

According to Bloomberg on the 20th (local time), Bundesbank issued a statement that President Weidmann will resign on December 31 for "personal reasons."

In a separate open letter, President Weidmann said, "More than ten years have passed, so I have concluded that it is time for a fresh start for both myself and Bundesbank."

He took office as Bundesbank President in May 2011, and his term was originally set to last until 2027.

A source familiar with the matter said that President Weidmann decided to resign earlier this year but had not disclosed his position until now, fearing it might affect the German general election held in September 2021.

An overseas media outlet, citing sources, reported that President Weidmann, regarded as a conservative hawk within the European Central Bank (ECB), may have expressed his intention to resign in opposition to the ECB's monetary easing policy stance.

In fact, President Weidmann has consistently criticized the ECB's monetary easing policy, which maintains interest rates at the lowest level until inflation stabilizes around 2%.

In the letter released on the day, President Weidmann also warned of inflation risks, stating, "It is critically important not to overlook future inflation risks related to the ECB's easing strategy."

Christine Lagarde, President of the ECB, upon hearing the news of his resignation, said in a statement, "It is regrettable, but I respect his decision."

The successor to President Weidmann will be decided by Germany's next government.

The center-left Social Democratic Party (SPD), the Greens, and the Free Democratic Party (FDP), which won the German general election, are scheduled to begin official negotiations to form a new coalition government on the 21st.

Candidates to succeed President Weidmann include Claudia Buch, Vice President of Bundesbank, and Isabel Schnabel, ECB Executive Board member.