Jens Weidmann

Jens Weidmann
8th President of the German Bundesbank
Assumed office
1 May 2011
Preceded by Axel A. Weber
Personal details
Born (1968-04-20) 20 April 1968
Solingen, Nordrhein-Westfalen
Nationality German
Alma mater University of Bonn

Jens Weidmann (born 20 April 1968) is a German economist and president of the Deutsche Bundesbank. Before assuming the top Bundesbank position in 2011, from February 2006, he served as Head of Division IV (Economic and Financial Policy) in the Federal Chancellery. He was the chief negotiator of the Federal Republic of Germany for both the summits of the G8 and the G20.

Early life and academic career

Weidmann was born in Solingen. In 1987, Weidmann graduated from gymnasium in Backnang, Baden-Württemberg after which he studied economics at Université Paul Cézanne Aix-Marseille III, the University of Paris, and University of Bonn. He received his Diplom in economics in 1993. From 1993 to 1994, he commenced his Ph.D studies on European monetary policy under the supervision of professor Roland Vaubel at the University of Mannheim, but later transferred back to Bonn again.[1] He received his doctoral degree under the auspices of monetary theorist Manfred J. M. Neumann in 1997. During his studies Weidmann had internships at the Banque de France and the National Bank of Rwanda. Due to the resulting knowledge of the French financing sector his later career in German financial politics was welcomed in France and seen as a support of the Franco-German twin engine. His education has been characterized as specialising in monetarist economics.[2]

Professional career

From 1997 to 1999, Weidmann worked at the International Monetary Fund. Until 2004 he worked as Secretary of the German Council of Economic Experts. During his time at the Council, he played a key role in compiling a 20-point plan for boosting growth and employment that formed the basis of then-Chancellor Gerhard Schröder’s Agenda 2010 reforms.[3]

From there he moved to the Bundesbank, where until 2006 he was the head of the Monetary Policy and Monetary Analysis group.

Advisor to Chancellor Angela Merkel, 2006-2011

In 2006, Weidmann began working at the Federal Chancellery, where he was responsible for preparing the content and strategy of the G-20 round which was formed to counter the effects of the financial crisis. When he started, he was the youngest department head in the German government.[4] Chancellor Angela Merkel promoted him in December 2009 to the influential role of the Sherpa of the G8 summits[5] as she considers the G8 round to be only a pre-summit of the G20 round in the field of the world-wide financial system as well as that most other subjects need a wider context than the G8 as well (compare Heiligendamm Process for G8+5).

During his time at the Federal Chancellery, Weidmann was involved in a series of major decisions in response to the financial crisis in Germany and Europe: preventing the meltdown of the bank Hypo Real Estate, guaranteeing German deposits and implementing a rescue programme for the banking system, piecing together two fiscal-stimulus programmes, and setting up the Greek bail-out package and the European Financial Stability Facility (EFSF).[6]

In 2011, Weidmann suggested to Merkel that the position of Bundesbank vice president, which had also become vacant, be filled by Sabine Lautenschläger, then director of Germany's Federal Financial Supervisory Authority (BaFin).[7]

President of the Bundesbank, 2011–present

In February, 2011, Weidmann was designated to succeed Axel A. Weber as president of the Deutsche Bundesbank.[8][9][10] In September, with the ongoing European sovereign debt crisis, Weidmann was observed by a British commentator, David Marsh, to be taking a "cool" course relative to Chancellor Merkel. Marsh wrote that Weidmann was saying the European Monetary Union (EMU) "has to go in one of two directions. Either it takes the path of a fiscal union in which member countries fuse together their economic and financial systems into a much more robust framework that will protect them from internal dislocation. Weidmann says, coolly, this is somewhat unlikely. Or EMU remains a looser grouping of countries that will face the discipline of the financial markets if they fail to produce economic convergence," namely exit from the EMU and default, looking particularly at Greece. Marsh also noted that Merkel is committed to the first course and so may come into conflict with her one-time economic adviser Weidmann.[11]

In a late November, 2011, speech in Berlin, Weidmann criticized the errors and "many years of wrong developments" of the EMU’s peripheral states, particularly the wasted opportunity represented by their "disproportionate investment in private home-building, high government spending or private consumption", David Marsh reported.[12] In early December, with another in a string of Eurozone summits imminent, Bloomberg commented that the new ECB head Mario Draghi "knows he can't afford to repeat" his predecessor Jean-Claude Trichet's mistake of alienating the Bundesbank. Draghi was said in the report to be courting Weidmann by, among others, Julian Callow, chief European economist at Barclays in London.[13]

In May, 2012, Weidmann's stance was characterized by US economist and columnist Paul Krugman as amounting to wanting to destroy the Euro.[14]

Weidmann, in late August 2012, was reported to have threatened to resign as Draghi's July 2012 promise to do "whatever it takes" to save the Euro seemed likely to lead to purchases of Italian and Spanish bonds to keep interest rates in those major member economies capped at manageable levels. "In an interview with Der Spiegel last week, Weidmann said the bond buying made it look as if ECB was financing governments directly — and shouldn’t go ahead", reported another MarketWatch commentator, Matthew Lynn. Lynn further speculated on the Draghi-Weidmann interaction, reminding readers of Axel Weber's 2011 resignation over a "similar [ECB] scheme" and also of the 1992 failure of the European Exchange Rate Mechanism over German refusal to choose "printing money (taking some small risks with inflation) ... to stabilize the system".[15]

On Wednesday, February 24, 2016, as part of the Bundesbank's annual news conference, Bundesbank president and European Central Bank Governing Council member, Jens Weidmann, dismissed deflation in light of the ECB's current stimulus program, pointing out the healthy condition of the German economy and that the euro area isn't that bad off, on the eve of the March 9–10, 2016 meetings.[16]

Other activities

Selected publications

References

  1. ↑ 'Ex-Professor von Jens Weidmann: "Der Aufgabe nicht gewachsen"', Stuttgarter Zeitung, 16 February 2011.
  2. ↑ Traynor, I, 'Jens Weidmann – the man with the key to Mario Draghi's handcuffs', Guardian, 1 August 2012.
  3. ↑ Christian Distasio (July 6, 2011), Efficient economist European Voice.
  4. ↑ Christoph Pauly and Christian Reiermann (February 21, 2011), A Merkel Advisor Goes to Frankfurt: What Awaits Weidmann as New Bundesbank Head? Der Spiegel.
  5. ↑ Spiegel Online: "Merkel beruft neuen Super-Sherpa"
  6. ↑ Christian Distasio (July 6, 2011), Efficient economist European Voice.
  7. ↑ Christoph Pauly and Christian Reiermann (February 21, 2011), A Merkel Advisor Goes to Frankfurt: What Awaits Weidmann as New Bundesbank Head? Der Spiegel.
  8. ↑ "Jens Weidmann wird Bundesbank-Präsident". Frankfurter Allgemeine Zeitung. 16 February 2011.
  9. ↑ McGroarty, Patrick (16 February 2011). "Germany's Merkel: Weidmann Will Take Up Post May 1". Wall Street Journal.
  10. ↑ Marsh, David, "Bundesbank renationalization under way: Commentary: Weidmann declares return to normality", MarketWatch, May 9, 2011.
  11. ↑ Marsh, David, "In euro crisis, Merkel is replaying 1931", MarketWatch, September 26, 2011, 12:01 am EDT. Retrieved 2011-09-26.
  12. ↑ Marsh, David, "Germany’s Helmut Kohl loses currency bet", MarketWatch, December 8, 2011, 5:22 am EST. Retrieved 2011-12-08.
  13. ↑ Black, Jeff and Simon Kennedy, "Draghi Courts Bundesbank in Bid to Avoid Trichet's Bond Fate", Bloomberg News via San Francisco Chronicle, December 8, 2011. Retrieved 2011-12-08.
  14. ↑ Krugman, Paul, 'Doubling Down', NY Times, 8 May 2012.
  15. ↑ Lynn, Matthew, "Gamble on ECB, but only with money you can lose", MarketWatch, September 5, 2012. Retrieved 2012-09-05.
  16. ↑ "Bundesbank President Dismisses Deflation, Increases Tension At ECB". Fast Company. 24 February 2016.

External links

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