Shortly before Christmas there should be an (almost) flying change at the top of the Bundesbank. On this Monday, the previous President Jens Weidmann will receive his certificate of discharge from Federal President Frank-Walter Steinmeier. Shortly beforehand, government circles confirmed that his successor at the head of the German central bank should be a nationally and internationally experienced banker: Joachim Nagel, 55.
The personnel decision goes back to an intra-coalition agreement that was mainly made between the SPD and FDP. In the negotiations with the Greens and the FDP, the SPD had secured the right to propose the successor to Weidmann – informally, however, without any notice in the coalition agreement. The FDP had agreed on the condition that they had to agree to the personnel – also informally.
On Monday it was said in Berlin that the FDP had fed Nagel into the follow-up debate, but officially it was an SPD proposal. If personnel decisions were not made confidentially, one could almost get the impression that the FDP and SPD had just made the first classic backroom decision. All the more so since the Greens’ right to propose in another personnel decision, the next German EU Commissioner, is properly noted in the coalition agreement.
From the point of view of the SPD and FDP, Nagel is likely to be an ideal candidate because he is an SPD member and at the same time stability-oriented. This pacifies both the social democratic side and the FDP, which wants to stage itself as the financial stability anchor of the traffic light coalition. The Federal Government decides on the appointment, the Federal President has the final say.
The economist Nagel had already been a member of the Board of Management of the Bundesbank from 2010 to 2016, when he replaced Thilo Sarrazin, who had resigned. Until 2020 he was on the board of the state-owned KfW banking group and has since been a member of the management of the Bank for International Settlements.
ECB director Schnabel was considered a promising candidate
In addition to Nagel, there were other candidates for the successor. ECB director Isabell Schnabel had long been considered particularly promising. Schnabel is considered to be non-partisan and very experienced. Your appointment would also have been a signal from Berlin that the federal government is taking action in the medium term for the presidency of the European Central Bank (ECB). If Schnabel had moved to the Bundesbank, she would have had an excellent chance of succeeding Christine Lagarde in six years.
Weidmann was appointed President of the Bundesbank under the then Chancellor Angela Merkel (CDU). When she said goodbye to Merkel, her confidante also took his hat off prematurely. Weidmann is leaving at his own request – also because he had been an opponent of the ECB’s loose monetary policy until the end and had repeatedly voted against its decisions alone. The same thing should happen to Nagel now.