Germany Should Not Run the ECB

Summary:

It is clear that Bundesbank boss Jens Weidmann wants to succeed Mario Draghi as President of the ECB.  It is also clear that making him president would be a mistake. To meet the challenges that lie ahead – a weakening eurozone economy and a potential debt crisis in Italy – the ECB will need to implement bolder monetary policy than seen to-date and to preserve its role as de facto lender of last resort to governments. The eurozone needs someone even bolder than Draghi – not a conservative like Weidmann, who has been reluctant to support or outright opposed to some of the ECB’s recent policies. Moreover, Germany already dominates eurozone policy-making through its veto on further reforms and on the use of the main bailout fund, the European Stability Mechanism (ESM). To appoint a German to lead the ECB would be a step too far.

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