Jens Weidmann, the head of Germany’s central bank for a decade and a close ally of Angela Merkel, plans to step down by year-end, amid disagreements with the European Central Bank’s low-interest-rate policies.
In a note to staff of the German central bank, the Bundesbank, Mr. Weidmann cited personal reasons, without elaborating. He had five years left in his term.
“I have come to the conclusion that more than 10 years is a good measure of time to turn over a new leaf — for the Bundesbank, but also for me personally,” he wrote.
The decision by Mr. Weidmann, 53, to leave early comes at a crucial time for both Germany and the European Union.
He is following the coming departure of Ms. Merkel as Germany’s chancellor and Europe’s longest-serving leader. It was Ms. Merkel who chose Mr. Weidmann — then a largely unknown 42-year-old economic adviser — in 2011 to lead the Bundesbank, representing Germany on the European Central Bank’s board. From that perch, Mr. Weidmann became one of the fiercest critics of the monetary policies of Mario Draghi, then the head of the central bank, to save the euro.
That opposition made him deeply unpopular with the European Union’s southern members, effectively dashing his chances of succeeding Mr. Draghi as president of the European Central Bank two years ago. But it made him a champion among central bank hawks who prefer tighter fiscal policies.
Mr. Weidmann’s decision comes as the European Central Bank weighs how to respond to rising inflation across the continent, a danger he had worried would arise from persistently low interest rates. (That said, he has dialed back his hawkish tendencies in recent years and publicly agreed with the main thrust of the bank’s policies, according to Holger Schmieding, the chief economist at Berenberg.)
In his announcement to the Bundesbank’s staff, Mr. Weidmann again warned of what he called “prospective inflationary dangers,” arguing that “crisis measures with their extraordinary flexibility” not overstay their welcome.