Axel Weber – A CBMD (Central Banker of Mass Destruction)
In a late summer interview to Bloomberg , Weber resumes his campaign to destabilize the Eurozone. His vision of a Decoupled EMU will see Greece exit the Eurozone.
It is summertime and Axel Weber, the powerful president of the Bundesbank decided that it is time to remind the world of his existence in an interview on Bloomberg television in Frankfurt on August 19.
After he failed to derail the Eurozone countries’ efforts to stave off the attack by the financial markets on Greek’s, Spain’s and Portugal’s sovereign debt, he is back.
There could not be a more hospitable platform than Bloomberg news agency from which to realaunch his attack on Trichet’s contribution to the defense of the Euro.
At the background, one should recall, is his ambition to replace Trichet as head of the ECB. In the aftermath of the Greek crisis and Weber’s disruptive interventions, many in political circles of the Eurozone raised doubts regarding his fitness to the ECB job. So the “Back to School” interview is likely a “first shot” in his fight for the desired post.
“ECB should discuss an exit strategy for special loan facilities to banks in the first quarter of 2011” declares Weber.
Any central banker and especially one of Herr Weber’s caliber understands the impact of such a statement on the markets.
He is casting doubts on the ability of banks in the “troubled rim of the Eurozone” to count on the ECB to shield them from speculative attacks against their government’s sovereign bonds.
His statements are accompanied by some convoluted commentaries concerning his so called dovish position issued by Bloomberg and its affiliated and like minded business news services[1]
One commentary goes:[2]
“Even though Weber, a “notorious hawk,” is talking about an exit strategy, he is not pressing for immediate withdrawal of these loan operations. In other words, he is saying these measures should remain in place until the first quarter of 2011.”
Oh! what a relief! He is a hawk, the message says, but he can restrain himself. So he is the right man for the job after all.
“This implies, that Weber thinks the euro zone economy will grow fast enough to warrant the exit of accommodative lending facilities to banks.”
By euro zone “growth” he means mainly Germany’s. This is Weber’s vision of a decoupled Eurozone. Such Decoupling will be achieved by pushing the countries on the (southern) rim of Europe “over the cliff” so to speak.
This comes on the heel of a successful activation of a Eurozone Stability Fund and the favorable reviews that Greece has received from the IMF and from Brussels.
Weber is signaling that if he won’t be elected as a replacement of Trichet, he will use his influence on ECB board members to pressure the ECB to depart from its current policies. The possibility that Mr. Axel Weber will be entrusted with the responsibility for the stability of the banking system in the Eurozone is very disquieting.
[1] http://au.ibtimes.com/articles/44449/20100821/weber-s-thoughts-on-ecb-bank-lending.htm
2010-08-21 » ehud