Bloomberg News

Asmussen Gets EU Parliament Committee Approval for ECB Job

October 10, 2011

(Updates with comment from Asmussen in fourth paragraph.)

Oct. 10 (Bloomberg) -- German Deputy Finance Minister Joerg Asmussen won the support of the European Parliament’s Economic and Monetary Affairs Committee to succeed Juergen Stark at the European Central Bank.

The committee recommended Asmussen’s nomination to the Executive Board of the Frankfurt-based central bank, Chair Sharon Bowles told reporters after a meeting in Brussels today.

Stark resigned last month after signaling his opposition to the ECB’s ramped-up program of buying sovereign bonds in a bid to tame the debt crisis. Asmussen, a trained economist, has been a key negotiator at the heart of German Chancellor Angela Merkel’s economic policy since she came to power in 2006.

“I think I’m well equipped to deal with the challenges” the ECB faces, Asmussen told lawmakers. “Some of you might say I’m not a central banker. This is obviously correct, but throughout my whole career I’ve been in touch with the central bank world. I think a divergent background can be value added.”

The change of personnel on the Executive Board comes as Germany, France and the ECB wrestle with Greece’s debt crisis and euro countries work on measures to recapitalize European banks and a ramp-up of their crisis-fighting fund. Merkel and French President Nicolas Sarkozy vowed yesterday to produce a plan by the end of October.

‘One Element’

Bank recapitalization should be “one element of a comprehensive package” to overcome the region’s crisis, Asmussen said. “This should be done in an EU 27 context to avoid a stigma effect” and should be done for all “systemically important” banks at the same time.

A crisis response should include bond purchases by the European Financial Stability Facility on the primary and secondary markets, Asmussen said. While “the enhanced EFSF should make the most efficient use of its funds,” it should do so “without access to central bank liquidity,” he said.

Asmussen also said the ECB has been the only actor in the euro area to respond “quickly and decisively” to the crisis. Sovereign-bond purchases “have not affected the independence of the ECB,” he said.

--With assistance from Jeff Black and Christian Vits in Frankfurt. Editor: Patrick G. Henry

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net; Jana Randow in Frankfurt at jrandow@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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