Weber: saw credibility problem with ECB job

[February 12, 2011]  BERLIN (AP) -- The outgoing head of Germany's Bundesbank decided against seeking the presidency of the European Central Bank because he believed his open opposition to its bond-buying program would have posed a credibility problem, according to an interview published Saturday.

Axel Weber was long a favorite to succeed Jean-Claude Trichet at the ECB when the Frenchman's term expires in October. But that status evaporated over days of confusion that culminated in Friday's announcement that Weber will leave the Bundesbank on April 30, a year early, for personal reasons.

Weber had voiced unease over the ECB's program, launched last year, to buy bonds of troubled eurozone countries and called for the program to be stopped.

Weber, 53, was quoted as telling the weekly Der Spiegel that he had taken "clear positions that I still stand by."

"These positions may not always have been conducive to my acceptance by some governments," he said. "I was aware since last May that a potential (ECB) candidacy would be impaired by this."

Weber was never formally proposed for the job, and said he had decided over recent months not to seek it. He said he indicated to Chancellor Angela Merkel in January that he was "not available for package solutions" combining his candidacy with policy issues, and the two agreed then to talk again in March.

"The ECB is the bulwark for stability in Europe," Weber was quoted as saying. "The president has a special position -- but if he represents a minority opinion on important questions, then the credibility of this office suffers."

Weber is a member of the ECB's governing council in his capacity as president of Germany's central bank. In the Bundesbank's tradition, he has been an advocate of tough steps to prevent inflation.

In Saturday's interview he underlined his concerns about the ECB buying government bonds, although he conceded that "the current volumes are controllable."

"That doesn't change anything about my fundamental concerns," he said. "A central bank must always be aware of what risk it is taking as soon as it acts in the border zone between monetary and fiscal policy."

Weber's departure from the ECB race leaves Trichet's succession wide open. Bank of Italy governor Mario Draghi is widely viewed as another front-runner, while analysts point to the possibility of a candidate from a smaller, northern country such as the Finnish or Luxembourg central bank governors.

"In the end, which nation provides the president is not so important," Weber said. The ECB needs "people who are credible, embody the culture of stability and can communicate this to Europe's population," he added.

Weber said he hasn't yet decided what he will do next, but he won't start a new job before next year.

[Associated Press]

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