president of the German Central Bank (Bundesbank) Jens Weidmann arrives for a G7 summit of Finance Ministers in May. Photo: AFP/Filippo Monteforte

As Asia Unhedged reported last month, Angela Merkel is laying the groundwork for a German takeover of the European Central Bank presidency in 2019, and she has found the man for the job.

Bundesbank chief Jens Weidmann, an outspoken critic of current ECB chief Mario Draghi’s, has toned down his rhetoric as the race for the bank’s presidency grows closer. And as the Wall Street Journal writes, despite the rift between Germany and much of Europe on the ECB’s stimulus policies, Weidmann is well positioned:

“Despite his unpopularity in some European capitals, Mr. Weidmann would have a strong claim for the top job. Germany is the region’s anchor economy, and the ECB was modeled on the Bundesbank. Mr. Weidmann’s predecessor, Axel Weber, was widely seen as the front runner before he pulled out of the race, a decision that infuriated Ms. Merkel. Crucially, only a minority of Eurozone governments have required bailouts—or come close. Many others are sympathetic to at least some German concerns.

With a rapprochement between the ECB and its most important shareholder, the Bundesbank, the bank could stand a better chance of winning acceptance in Germany for some of its policies. And, as the ECB navigates an exit from its stimulus, it would stand a better chance of avoiding a public fight that could confuse investors and rattle financial markets.”

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