Confusion at the German central bank

The presidency of the European Central Bank (ECB) is one of the most influential positions in the European Union. This institution is, after the US Federal Reserve, the most powerful central bank in the world; it sets monetary policy for all the national economies that share the euro as their currency.

Economic growth and employment in the euro zone depend directly on the amount of money in circulation, on the part that reaches companies and households as credit financing, and on the price of money - i.e. the interest rate. These are decisions made by the ECB's Governing Council, on which the president has a differentiated power.

The effective authority of the holder of the post has a lot to do with his technical and academic abilities, and with the leadership he is capable of establishing in the Council. Jean-Claude Trichet, having served out the two terms permitted by the statutes, has earned this basic respect, in spite of the erroneous decisions that have been made under his presidency.

The ECB councilor Alex Weber, president of the Bundesbank since 2004, was until last week the candidate best situated - and apparently destined - to succeed Trichet. The German government was counting on this representative of the ECB's most rigid sector to ensure that monetary policy would not deviate from orthodoxy. It was Weber, among others, who at the most intense phase of the financial crisis, in July 2008, led the surprising and isolated raising of ECB interest rates - a prelude to the recession in the euro zone. His withdrawal from the running order now puts the German authorities in a delicate situation.

The predictability and rigor of German policy are once again being called into question. Weber, who only three days ago informed Chancellor Merkel of his decision, is giving up this career step "for personal reasons." These reasons may, in fact, consist of a job offer from one of his country's major private banks, once the obligatory two years of separation from the financial system have gone by. His predecessor in the presidency of the Bundesbank, Ernst Welteke, was obliged to resign for having accepted a gift from the Dresdner Bank. Confusion, at the very least, has now arisen in this most respected German financial institution, and does not exactly strengthen this country's position in the euro zone.

The choice of an ECB president no longer requires Franco-German national credentials as a necessary assurance of sound performance. The principal objection to the other candidate, the Italian Mario Draghi, will be not so much his belonging to a peripheral central bank, as his past close links with the omnipresent investment bank Goldman Sachs, whose role in the financial crisis is still controversial to say the very least.

The ECB's statutes, and its accumulated experience, constitute abundant assurance so that any councilor can occupy the presidency provided he has sufficient technical qualification and flexibility, without needing to proceed from the central economies of the euro zone.