Germany Nominates Asmussen to Succeed Stark at ECB

The Wall Street Journal

By GEOFFREY T. SMITH

MARSEILLE, France—The German government has nominated Jörg Asmussen to succeed Jürgen Stark on the executive board of the European Central Bank, Finance Minister Wolfgang Schaeuble said Saturday.

At a news conference after weekend meetings of the finance ministers and central-bank governors of the Group of Seven leading industrialized nations, Mr. Schaeuble said he hoped that Mr. Asmussen would be able to assume Mr. Stark's duties toward the end of the year.

Mr. Asmussen is currently deputy finance minister. His position there is something of an anomaly, as he is a member of the Social Democratic Party in a center-right government of Christian Democrats and Free Democrats. He originally had been appointed by the previous finance minister, Peer Steinbrück, who served under Chancellor Angela Merkel in a "Grand Coalition" until autumn 2009. Finance Minister Schaeuble had kept him on because of his first-hand experience of the first wave of the financial crisis.

Mr. Schaeuble said he had notified Jean-Claude Juncker, head of the euro group of finance ministers, of the government's proposal earlier Saturday. The proposal must be endorsed first by the euro group and the euro-zone's heads of state, and the European Parliament and the ECB itself must also be consulted.

With Mr. Asmussen having accumulated profound experience of the euro zone's debt crisis over the past three years, and with the substantial political will of Germany behind the proposal, it is unlikely that the nomination will fail.

Joachim Poss, deputy finance spokesman for the SPD in Berlin, said that the Finance Ministry had "made a good choice," and dropped the clearest hint yet that the reasons for Mr. Stark's sudden resignation, which shocked financial markets Friday, lay in the ECB's controversial policy of buying the government bonds of troubled states. Mr. Stark himself had cited only "personal reasons."

"It's to be hoped that the political conditions that would make it unnecessary for the ECB to buy government bonds in future will be put in place as quickly as possible," Mr/ Poss said. "That would allow [Asmussen] a better working basis than Jürgen Stark had to date."

Mr. Asmussen's nomination to the ECB is resonant for another reason. Like the new Bundesbank President Jens Weidmann, he is a former student of Axel Weber, the university professor-turned-central banker who seemed destined to be the next head of the ECB before his own shock resignation in February. Mr. Weber had criticized the ECB's bond-buying program more explicitly, and appeared reluctant to accept a position where he would be repeatedly outvoted on the issue.

Elsewhere in the news conference, Mr. Schaeuble repeated that Greece must meet the conditions set for it by its official creditors before the next tranche of aid will be disbursed. He said that both the euro zone's governments and the International Monetary Fund were agreed on this.

He also dismissed suggestions that Greece would go bankrupt if the tranche isn't disbursed on time, noting that the country had moved up the issuance of short-term debt to bolster its cash balances. Greece earlier this week sold €1.45 billion ($1.98 billion) of six-month treasury bills.