German Chancellor Olaf Scholz picked economist Joachim Nagel as the new president of the Bundesbank. This is reported by Handelsblatt and Der Spiegel, both citing government circles. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, has commented on that matter:

ZEW economist Friedrich Heinemann sitting on a chair.
The Bundesbank is likely to stay true to its line, says ZEW monetary policy expert Professor Friedrich Heinemann on the staff decision at the German Bundesbank.

“It is good that the race for the office of Bundesbank President was not won by someone who has too little critical distance from the ECB. Joachim Nagel is a Bundesbank veteran and an experienced central banker. He has extensive monetary and financial policy expertise, which is indispensable in making complex monetary policy decisions. He can be trusted to continue representing the Bundesbank’s tradition in the debates of the ECB Governing Council without being ideologically entrenched. The hopes in Southern Europe that the Bundesbank would send a dove who sympathises with government bond purchases to the Council are now over. True to the ECB’s mandate, Nagel will certainly give more weight to the dangers of inflation than to the financing interests of highly indebted states. With him, the German Bundesbank is likely to remain true to its line of maintaining and further developing the regulatory framework agreed in Maastricht with its emphasis on price stability and sound finances.”

Date

20.12.2021

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