Former Bundesbank President: Lagarde and Merkel regret Weidmann's resignation

ECB President Christine Lagarde regretted Bundesbank boss Jens Weidmann's decision to step down at the end of the year.

You respect his decision, "but I deeply regret it," said Lagarde on Wednesday.

Weidmann had surprisingly announced that he would resign from office for personal reasons.

"Jens is a good personal friend whose loyalty I have always been able to count on," said the ECB President.

As the longest-serving member of the highest decision-making body of the European Central Bank - the Governing Council - he had unparalleled experience that he shared at all times.

Weidmann had clear ideas about monetary policy.

"But I was always impressed by his search for common ground in the Governing Council and his willingness to find a compromise," said Lagarde.

"I will miss Jens and his always constructive and cheerful approach in all of our discussions." In the past, Weidmann had repeatedly criticized the central bank's ultra-loose monetary policy.

Merkel, Scholz and Lindner react

Chancellor Angela Merkel also regretted the decision.

At the same time, you have great respect for his decision, said government spokesman Steffen Seibert on Wednesday in Berlin.

Weidmann represented the Bundesbank “outstandingly nationally and internationally”.

Merkel thanked him for his work "in these very challenging years of his term of office in terms of monetary and financial policy," said Seibert.

"It will now be the task of a new, future federal government to find a successor."

Finance Minister Olaf Scholz also thanked Weidmann for his commitment over the past ten years.

"He not only had a decisive influence on monetary policy in Germany and Europe during this period, but also advanced the further development of the international financial markets," said the SPD candidate for chancellor and vice-chancellor on Wednesday.

“Jens Weidmann has done a great deal to our country,” he emphasized.

FDP leader Christian Lindner also expressed his regret: "He stood for a stability-oriented monetary policy, the importance of which is growing in the face of inflation risks," he said.

“With him, the Deutsche Bundesbank was an important voice in Europe.

The FDP recommends Germany continuity. "

According to the Bundesbank Act, the federal government proposes a candidate for the office.

The Federal President has the final say in the appointment.

A spokesman for the finance ministry pointed out that the federal government, which was only executive after the election, was required to exercise political restraint.

It is therefore assumed that the coming federal government will take care of the personnel.

According to the current status, the SPD, Greens and FDP want to decide before Christmas on the formation of a joint government.

Falcon or dove?

Friedrich Heinemann, economist at the Center for European Economic Research in Mannheim, sees the resignation as "a major loss for the Governing Council". The previous Bundesbank president was one of the “few reminders” there and “continuously warned against excessive demands on monetary policy and too close to fiscal policy,” said Heinemann. Weidmann will be absent when it comes to next year “whether the ECB takes the goal of fighting inflation more seriously than the interest of finance ministers in low interest rates and bond purchases”.

Heinemann also warned: “The new federal government has a great responsibility for new appointments. If Germany were to send a monetary policy pigeon to the Governing Council, it would be fatal. ”Economists and monetary watchdogs who tend to stand for a loose monetary policy are referred to as pigeons. Hawks - which Weidmann is one of them - prefer a stricter monetary policy.

Commerzbank chief economist Jörg Krämer thinks it is likely that there will be a change of direction: “A new federal government will hardly appoint a Bundesbank president who again contradicts the majority opinion in the ECB Council.

In this respect, Weidmann's successor is likely to be less hawkish than Jens Weidmann, ”said Krämer.

That makes it "certainly not more likely that the ECB will exit its very expansionary monetary policy in the foreseeable future, although the risk of inflation has risen significantly recently."