Officially he resigned for “personal reasons”, but behind Jens Weidmann’s sudden move, there would be more. To be exact, a lack of compatibility with the government that would seem to be about to be born, with the so-called “traffic light coalition” between Social Democrats, Greens and Liberals. A triptych that seems destined to drastically review the German position on a series of economic issues on which Weidmann he has always been the guardian. He, who was often portrayed smiling with Angela Merkel, could have felt out of place or out of place with a government that instead wants to readjust its position on various issues.
The new ecological line and pro investments which seems to come out of the first negotiating approaches of the SPD, Fdp and Verdi does not go very well with Weidmann’s line. Behind the official statements, there would be precisely the awareness that the ouster of the CDU from the government may in fact undermine its intentions, already frustrated by the monetary policy of the ECB and inflation close to 5% in Germany. It is clear that a possible expansionist line would risk opening up a clash between the federal government and the Bundesbank, something that nobody in Germany wants. Meanwhile, in parallel, another of the major German hawks has to leave his chair. It is about Wolfgang Schauble, which must leave the presidency of the German parliament to a member of the party most voted in the elections, namely the SPD.
Weidmann’s farewell is a relevant signal, which makes it clear that beyond the official statements, the internal debate among the members of the possible coalition is quite heated. The probable chancellor, Olaf Scholz, he has repeatedly stated that the Stability Pact, as it stands now, “is sufficiently flexible”. The same document on which the negotiations are being conducted seems to go in one direction: “The Stability Pact has shown its flexibility. On its basis we want to ensure growth, maintain debt resilience and make sustainable and climate-conscious investments” , reads the document. Too bad, however, in reality, the position of Scholz and the SPD would be different. Indeed, the Social Democrats’ program reads that the current pact should be transformed into a “pact for sustainability” with the replacement of cuts and savings with new investments.
Fdp and Verdi will have to find a synthesis, also because they both aim at the Ministry of Finance. Robert Habeck of the Greens has said several times that he is in favor of easing debt repayment rules at the European level. On the other hand, the leader of the liberals Christian Lindner, who already in the electoral campaign reiterated several times that the stability pact should not be touched, takes the opposite position. The fear of a general softening of the rules in Europe animates not a few voices in Germany and from this malaise Weidmann’s resignation would be born, and he would not have felt protected enough by the probable traffic light coalition.
It is no coincidence that the CDU, in a critical way, and the FDP, in a more proactive way, take a position on his farewell being part of the group of parties involved in the negotiations for the formation of the government. According to Carsten Linemann, CDU MP, Wedimann’s resignation is “a fatal signal” for the monetary policy of the Eurozone. Florian Toncar, deputy and responsible for the finances of the FDP, asked to continue along the line traced by Weidmann: “I would like to see some continuity in the future” at the helm of the Bundesbank. Just as Lindner stated that the Bundesbank “must continue to support a stability-oriented monetary policy in Europe”.
Meanwhile, the race for succession opens. The favorite seems to be the vice Claudia Buch, but in the race there are also the head of the economics desk of the Budnesbank, Jens Ulrbich, economists Volker Wieland, Lars-Hendrik Röller, Marcel Fratzscher, Lars Feld and Jakob von Weizsäcker. However, the candidacy of Isabel Schnabel, a member of the ECB board who could decide to go home.
#Germany #Weidmann #incompatibility #traffic #light #FdpVerdi #fight