German Chancellor Angela Merkel today chose Jens Weidmann, a close aide, to head Germany's powerful central bank, a move analysts took to mean she has given up on having a German lead the European Central Bank.
The appointment of Weidmann, 42, followed the surprise resignation of Axel Weber last week and sparked concerns in some quarters that the jealously guarded independence of the Bundesbank might be undermined.
'Anyone who knows Jens Weidmann knows that has excellent professional skills, a brilliant intellect and that he has an independent mind,' Merkel said, apparently responding to such concerns.
Weidmann will take up his new position on May 1, Merkel said, also appointing Sabine Lautenschlaeger-Peiter as vice-president of the institution.
Foreign Minister and vice-chancellor Guido Westerwelle said Germany had not 'given up on its ambitions for the ECB. We want to contribute to a German culture of stability in Europe.'
Weber was a front-runner for the ECB job and there was much speculation that Berlin had held off from pushing for other top European positions in the hope of getting their man into the Eurotower in Frankfurt, the ECB's headquarters.
Compatriot Juergen Stark remains on the ECB's six-person Executive Board and an unwritten rule says two people from the same country cannot sit on this body.
For Germany to secure the top job, Stark would either have to step down or be given the Bundesbank presidency, neither of which is now likely. Analysts said that Italy's central bank governor Mario Draghi was now the favourite for the ECB job.
Considered a young economic prodigy at the tender age of 42, Weidmann has enjoyed a stellar career, taking in the Bank of France, the International Monetary Fund and spending the past five years as Merkel's close economic aide.
He has piloted her through a series of crises, including the international financial meltdown, resulting banking problems in Germany, a months-long saga over the future of carmaker Opel and the recent European debt difficulties.
He will now head the Bundesbank and, perhaps more importantly, sit on the Governing Council of the ECB, the 23-person body that decides interest rates for the euro zone area.
Some questioned the appointment of someone so close to the centre of power as head of the Bundesbank, an institution that has always jealously guarded its independence from political interference.
Such a nomination is not without precedent however. One of the most respected Bundesbank presidents, Hans Tietmeyer, was a junior finance minister and an advisor to former chancellor Helmut Kohl. While he was the central bank chief, Tietmeyer orchestrated the euro's introduction in Germany.
