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11 September 2011

FT: Germany rewrites its contract with ECB


Jürgen Stark's surprise resignation as ECB executive board member on Friday was a serious jolt to the eurozone, at a time when worries over a Greek default were already fraying financial market nerves.

Mr Stark was Bundesbank vice-president until he took over from Mr Issing in 2006. He was the ECB’s conservative voice, admonishing governments fiercely for flouting the eurozone’s fiscal rules he had helped write in the 1990s. In private, Mr Stark lobbied against the controversial decision to intervene in government debt markets, which he fretted had blurred the boundary between fiscal and monetary policy and undermined ECB independence.

Arguably, the ECB will be freer to act without Mr Stark, whose departure follows February’s resignation of Axel Weber, Bundesbank president, after similar disputes over ECB strategy. Jörg Asmussen, Mr Stark’s likely replacement, and Jens Weidmann, the new Bundesbank president, were both pupils of Mr Weber when he was a university economist. 

Full article (FT subscription required)



© Financial Times


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