To: long-gone who wrote (39693 ) 8/27/1999 12:43:00 PM From: Alex Read Replies (1) | Respond to
Germany may lose influence in ECB under Welteke It was also Welteke who read out the Bundesbank"s comment to former German Finance Minister Theo Waigel"s quick-fix attempt to revalue the Bundesbank"s gold reserves and use the proceeds to pay back old eastern German debt. Key representatives of Frankfurt"s financial community, who had gathered on the occasion of the state central bank"s 50th anniversary, applauded loudly and lastingly when Welteke convincingly rejected "operation goldfinger" as an attack on the Bundesbank"s independence. "Welteke is a good man and his public comments as Bundesbank president will have an impact just like those of other monetary officials. The key question is how much influence he will have behind closed doors on the ECB council," said Merrill Lynch"s Holger Schmieding. Tietmeyer today appears as a shadow of another age in which the Bundesbank de facto set interest rates for most of Europe. "Tietmeyer today still profits from the phase in which the Bundesbank was independent. Welteke will not have as much influence, he will only be one among 11," Schmieding said. "Tietmeyer"s departure is the farewell of the old Bundesbank," he said. The changeover from Tietmeyer to Welteke was synonymous with declining Bundesbank influence within the ECB, Schmieding said. Rust added it was difficult to say how this shift in weights would impact on the ECB"s decision-making process. In terms of his qualification in the subject of monetary policy and his international contacts, Welteke would not measure up to Tietmeyer"s standard, she said. Welteke would surely do a good job and Germany, despite the concept of "one man one vote," would continue to be one of the countries figuring more prominently on the ECB council, she said. Deutsche Bank"s Manuela Preuschl said one should be careful not to underestimate Welteke as a competent and influential monetary policy official. "One should not make the mistake to wave Welteke aside as a featherweight. Welteke has made himself a name and it may be quite advantageous that he is not quite as formal as Tietmeyer and not such a high priest of price stability," Preuschl said. Influence on the ECB council in the end was not so much a function of personality and prestige but rather the size of the economy and its population, Preuschl said. "Welteke will not fit into Tietmeyer"s shoes right away, but there will not be a big change as a result of the changeover," she said. Tietmeyer will leave office at the end of this month and Welteke will head the Bundesbank from Sep 1. It remains to be seen whether Tietmeyer will stick to the promise he made toward Frankfurt-based journalists not to talk about interest rates and monetary policy any more after the end of his career with the Bundesbank. End Bridge News, Tel: +49-69-25 616 700 Send comments to Internet address: econ@bridge.com German government website: bundesregierung.de Bundesbank: bundesbank.de LINKS The Bridge ID for this story is ZDLBVR
