One of the more vocal members of the ECB’s governing council and executive board, 47-year old German Joerg Asmussen, surprisingly announced this morning that he is stepping down for “purely private family reasons.” Concurrently, the German who has been a less tenuous version of his far more outspoken and hawkish compatriot Jens Weidmann, announced that he would accept a job as Deputy Labour Ministry job in the new German
government. What is surprising is that the German was not appointed finance minister in Merkel’s new cabinet, although with Schrodinger Schauble determined to keep his position it is explainable. What is more surprising is that Asmussen replaced none other than Juergen Stark, who once was said to be Trichet’s successor, and who dramatically quit the ECB over disagreements on the bank’s bond monetization program. One wonders: is Joerg’s untimely departure just the latest indication that the ECB is finally preparing to unroll a blanket quantitative easing program, just as BNP predicted it would, in its desperate, last-ditch attempt to defeat Europe’s slide into outright deflation and credit-creation collapse? Certainly, if Weidmann were to quietly leave next, then whatever you do, don’t stand below the Euro.
The full details from Reuters:
Asmussen, a member of the centre-left Social Democrats (SPD), was a highly regarded deputy Finance Minister in Berlin between 2008 and 2011 before being appointed to the ECB Executive Board by Chancellor Angela Merkel in 2012.
He has since become a well-recognised face in European financial circles, giving speeches from Athens to Madrid. His surprise return to Berlin and inclusion in the government adds a dash of international flair to the right-left coalition that takes office on Tuesday.
Asmussen said he wanted to move back from the ECB headquarters in Frankfurt – and accept what is ostensibly a lesser job – in order to spend more time with his young family.
“This wasn’t an easy decision for me,” the 47-year-old said in a statement to Reuters after the appointment was announced by Labour Minister Andrea Nahles.
“I’ll be stepping down soon as a member of the ECB Executive Board. The reasons for this step are purely private, having to do with my family situation.”
He added: “It’s just not possible in the long run to reconcile having a position based in Frankfurt, with frequent business trips, and having my family and especially my two very young children in Berlin. There is definitely no other reason.”
Asmussen succeeded Juergen Stark, who stepped down from the ECB board in a row over its bond-buying programme.
Alongside Bundesbank President Jens Weidmann, but with perhaps less tenacity, Asmussen at times criticised the ECB’s expansive policies. Both defended the ECB’s last interest rate cut in November as justified, however.
ECB President Mario Draghi said Asmussen will be missed.
“Joerg Asmussen has been a tremendous help in shaping the monetary policy in the past two years while successfully addressing many other challenges,” Draghi said in a statement. “I will personally miss him.”
Merkel said she was looking forward to working with Asmussen again, and that Germany would propose a successor at the ECB.
Among the top candidates are Bundesbank vice president Sabine Lautenschlaeger, BaFin head Elke Koenig and the head of the Halle institute for economic research, Claudia Buch – all women.
Asmussen’s name had been mentioned in recent months as a possible candidate for Finance Minister if the SPD took control of the ministry that it held in the last “grand coalition” from 2005 to 2009, when Asmussen was a deputy to Peer Steinbrueck.
But Asmussen had been consistently non-committal on the issue, saying he planned to fulfil his contract as an executive board member at the ECB that ran until end of 2019.
In the end, Merkel’s Christian Democrats (CDU) retained control of the Finance Ministry with veteran Wolfgang Schaeuble, 71, staying in charge.
While Asmussen has enjoyed a sterling reputation with the SPD’s conservative wing and across the aisle in Merkel’s CDU, he was viewed with suspicion by the SPD left – which is informally led by Nahles.
Asmussen’s move to the ministry could help improve his standing on the left in the long term. Nahles told Reuters she was looking forward to working with Asmussen as her deputy.
“I’m delighted that Joerg Asmussen will be a state secretary in the Labour Ministry and bring his great executive experience and full engagement into this key ministry,” she said.