Business

Juergen Stark in surprise resignation from ECB

  • 9 September 2011
  • From the section Business
Juergen Stark
Juergen Stark's resignation is regarded as a blow for the ECB, say analysts

European Central Bank chief economist Juergen Stark has resigned amid speculation of conflicts within the ECB over its bond-buying programme.

The ECB said the German was leaving "for personal reasons", but would stay in the job until a successor is found.

In February, German central bank boss Axel Weber quit the race to become the ECB's next president over the bank's policy of buying the debts of troubled eurozone governments.

Analysts said Mr Stark's surprise move pointed to continuing divisions in Germany over the ECB's direction.

European stock markets fell after the news, on concerns that any differences within the ECB would make tackling the eurozone debt crisis more problematic.

Mr Stark's departure comes almost three years before his term is due to expire in May 2014.

'Remarkable'

He was reportedly one of four members of the ECB who voted against last month's controversial decision to revive a programme of buying the bonds of indebted eurozone nations.

Former Bundesbank President Axel Weber, who had been the frontrunner to succeed ECB President Jean-Claude Trichet when he retires at the end of next month, resigned and withdrew from the race in February in opposition to a bond-buying policy.

"This is remarkable," said Manfred Neumann, economics professor at Bonn University. "Stark held the same view of the bond-buying as Axel Weber and the current Bundesbank president.

"This is a sign of huge problems within the central bank. The Germans clearly have a problem with the direction of the ECB," he said.

In recent weeks, the ECB has bought more than 35bn euros (£30bn) in bonds, significantly reducing Italian and Spanish spreads over benchmark German Bunds, on top of the 76bn euros in Greek, Irish and Portuguese bonds it has bought since May 2010.

Politicians in Germany are under pressure amid public anger that they are helping to finance the bailouts of weaker economies.

There were reports on Friday that German deputy finance minister Joerg Asmussen will be appointed to replace Mr Stark.