Jens Weidmann: the hawkish revolutionary at the ECB

Jens Weidmann © Rex Features
Jens Weidmann: plotting to take over at the ECB?

Jens Weidmann has long been “the unabashed hawk” at the heart of the European Central Bank (ECB) – “the voice of German opposition to unconventional monetary policies”, says the FT.  Now, an “uncharacteristic period of reserve” from the Bundesbank president could mean that he is “mounting a quiet campaign to take over as ECB chief” when Mario Draghi’s term ends late next year.

Yet his views on the best way to fight the euro crisis “have been constantly out of sync” with the majority of the ECB’s governing body. As one senior official observes: Weidmann “has never defended the ECB to the German public [or] proven that he can speak for all. That’s a big weakness if you want to lead a multi-country institution.” Once described by the Süddeutsche Zeitung as “frighteningly correct”, Weidmann has never made any bones of his dislike of Draghi’s “whatever it takes” mantra, viewing it as a sop to “reform shy” politicians, says The Irish Times.

Born in 1968 into a middle-class family, and raised in Baden-Wurttemberg in southwestern Germany, Weidmann is an economists’ economist – a workaholic white-boarder, “more interested in empirical evidence than ideology”, according to Breakingviews.com’s Olaf Storbeck. “He once told me that the first thing he reads in each new issue of The Economist is the ‘Economics Focus’ on current research.”

It’s been a lifetime pursuit. Weidmann combined his university studies at Aix-en-Provence, and later Paris and Bonn (where he majored on the neo-classical model) with work experience at the central banks of France and Rwanda. After receiving his doctorate in 1997, he joined the IMF before returning to Germany where he served on the German Council of Economic Experts and later the Bundesbank.

Weidmann came to prominence as Angela Merkel’s chief “sherpa” at G8 and G20 meetings and developed plans to shore up the euro when the sovereign-debt crisis struck. He devised the German blueprint for the Greek aid package. Although he “prefers to operate from the shadows” rather than take centre-stage, his influence on Merkel shouldn’t be underestimated, noted the FT in 2011, when Weidmann became the Bundesbank’s youngest-ever president.

Weidmann bats off questions about the ECB succession. But if he does get the top job, we can expect a change of direction from Germany’s “boyish monetary hawk” extending some way beyond the debate over how quickly the stimulus package should be dismantled, says The Guardian. While Draghi has long argued that monetary union requires “a political union in order to flourish”, Weidmann disagrees. “The usual instinct of EU institutions – to answer crises with ‘more Brussels’, more integration – no longer resonates with the public,” he says. “Integration cannot be an end in itself.” No wonder senior eurosystem officials are running scared.