Alarm signal from Frankfurt: Central bank chief Jens Weidmann throws in the towel

The withdrawal of Bundesbank President Jens Weidmann at the end of the year is a high-pitched alarm signal. Officially, the head of the central bank explains his decision with personal reasons. “A tenure of more than ten years” is “a good time to start a new chapter,” said Weidmann in a letter to the bank's employees. It is easy to decipher that this is hardly the real reason for his resignation: it was only in 2019 that he had his mandate extended by another eight years, i.e. until 2027.

Now all of a sudden the completely unexpected farewell. Something else comes to mind as the actual motif. Weidmann has always defended the stability culture of the old D-Mark era, albeit much more quietly than his predecessor Axel Weber, who threw down in protest against the "rescue of Greece" in 2011. Unfortunately, Weidmann had to experience that his warnings were ignored. Euro ideologues in Brussels as well as the soft currency and debt states of southern Europe make up the majority at the top of the European Central Bank (ECB), where ever new "programs" are launched to allow the highly indebted countries even more deficits for all the euro countries , especially Germany, have to stand up.

Since a kind of rotation principle was introduced, the Bundesbank no longer even had a permanent seat and vote on the governing body of the ECB. According to this, the German monetary authorities have to watch without voting rights from time to time as the other members move billions, the burden of which Germany, as the largest euro economy, bears a quarter. Weidmann has quietly accepted this scandalous and unjust resetting of the largest contributor.

Now, however, two events come together that may have been the decisive factor in ensuring that even the calm and conciliatory Weidmann has had enough.

First there is the emerging traffic light coalition. The FDP has vowed to defend the debt brake at all costs. But the SPD and the Greens are already tinkering with broad secret routes to circumvent this promise. New national debts worth billions of euros, economically damaging and on a global scale meaningless climate measures are to remain exempt from the lock.

On the other hand, the top of the ECB will presumably decide in December whether or not to allow its debt and money increase program to cope with the consequences of the pandemic, called PEPP, to expire as planned in March. With PEPP, the endless increase in money at the ECB has once again accelerated significantly. We have already heard from Rome and Paris that they want the PEPP measures to be extended.

Jens Weidmann has repeatedly warned that the endless increase in money and unlimited debt-making can at some point undermine the stability of money itself and lead to destructive inflation. What is now emerging in the ECB and what is likely to be the next German government coalition is continuing on this fateful path, and at an increased pace. Apparently, Weidmann no longer wanted to hold his head for this.

His move is therefore extremely worrying news for the Germans. Because inflation, which the outgoing Bundesbank President has repeatedly warned about, is already picking up speed, as is well known.

Source: Preußische Allgemeine Zeitung