Joachim Nagel (l) is to become the new president of Germany's central bank, succeeding Jens Weidner (r). (picture alliance / dpa)
Economist Joachim Nagel is to become the new president of Germany's central bank, the Bundesbank.
Chancellor Olaf Scholz and Finance Minister Christian Lindner have proposed the 55-year-old to succeed Jens Weidmann, Lindner announced on Twitter on Monday.
The appointment has to be confirmed by the Cabinet.
Weidmann announced in October that he would step down on December 31 for personal reasons after more than 10 years in office.
Nagel, who is a member of the Scholz's Social Democratic Party (SPD), was on the executive board of the Bundesbank from 2010 to 2016. He then went on to the development bank KfW and currently works at the Bank for International Settlements (BIS), also known as the central bank of central banks.
He studied economics in his native city of Karlsruhe and earned his doctorate at the university there.
Lindner emphasized that in view of inflation risks, the importance of a stability-oriented monetary policy is currently increasing. Nagel is "an experienced personality who will ensure the continuity of the Bundesbank," he wrote.
The Cabinet meets on Wednesday for the last time before Christmas. It is unclear whether the appointment would be on the agenda.
Banking associations and economists welcomed Nagel's nomination. The president of the Association of German Banks (BdB), Christian Sewing, head of Deutsche Bank, said that "an expert with many years of experience in central banking and excellent knowledge of the financial markets will be appointed to head the German central bank."
The president of the Sparkasse chain of German banks, Helmut Schleweis, expressed his conviction that with Nagel at the helm, the Bundesbank would "continue its tradition of stability-oriented monetary policy."
Weidmann's second eight-year term would have run until the end of April 2027. The economist had taken over the post in Frankfurt in May 2011 at the age of 43 as the youngest Bundesbank head. Weidmann succeeded Axel Weber, who quit in a dispute over the European Central Bank's (ECB) anti-crisis policy.
Weidmann, former economic advisor to recently departed long-time German chancellor Angela Merkel, has also repeatedly been critical of the ECB's ultra-loose monetary policy, which has been in place for years.
He was particularly sceptical about the multibillion-euro bond purchases and warned that the central bank should not make governments dependent on cheap central bank money.
In view of rising inflation, Weidmann warned that Europe's monetary guardians should not ignore the risk of too high inflation and should not stick to their very expansionary course for too long. However, supporters of a loose monetary policy currently have the majority on the ECB's governing council.
The Bundesbank president is involved in the decisions of the ECB's highest decision-making body, but like the representatives of the other 18 euro countries he has only one vote, even though Germany is Europe's largest economy.
The President of the Federal Association of German Cooperative Banks (BVR), Marija Kolak, links Nagel's appointment among other things to the hope that the Bundesbank in the ECB governing council "will work for an early end to minus interest rates in the interest of savers."
According to Stefan Kooths, head of economic research and vice-president of the Institute for the World Economy (IfW), Nagel is likely to be among those "who put forward counter-arguments to the current ultra-expansive monetary policy."
But Kooths qualified: "At the same time, Nagel's appointment does not change the majority situation in the ECB governing council. So the supporters of loose monetary policy can be relaxed about the new Bundesbank head."
The first monetary policy meeting of the ECB governing council in the new year is scheduled for February 3.
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
