MNI SOURCES: Weidmann Down But Not Out Of ECB Running

--Bundesbank chief Jens Weidmann may still have a chance of replacing Mario

Draghi

By Luke Heighton

     LONDON (MNI) - Rumours of the death of Jens Weidmann's chances of becoming

European Central Bank president have been exaggerated, sources have told MNI,

with Bundesbank officials said to be nonplussed by recent claims he has little

chance of succeeding Mario Draghi.

     Weidmann's position as favourite for the ECB's top job after Draghi's

October 2019 departure has long been an open secret in central bank circles. Yet

his status was reported to have slipped markedly in late August, when Berlin was

reported to have set its sights on securing influential positions in Brussels

instead.

     However, while the Chancellor's support for her former economic adviser

might appear to have diminished, Bundesbank officials feel he is far from out

for the count, according to a well-placed source.

     Merkel has denied reports, originally in Handelsblatt, of sacrificing

Weidmann in exchange for securing the presidency of either the European

Commission for a candidate such as Manfred Weber, or the European Council

presidency for herself when Mario Centeno steps down, scheduled to be in June

2020.

     "Whatever else one might think of her, that's not the sort of thing she

would say if it weren't true," the source said.

     -- MERKEL UNLIKELY TO "BURN" WEIDMANN

     The CDU leader was reported to have given her tacit support to centre-right

MEP Weber's application, which was formally announced on Wednesday, to become

the next European Commission president.

     But the Chancellor was highly unlikely to "burn" Weidmann's chances at the

ECB before she had clearly identified and expressed open backing for her

preferred Brussels candidates, the source said.

     "All the candidates the Germans have for the presidency of the Commission

are not seen as really strong candidates. So they cannot be sure, if this is a

strategy, that this will work out in the end," another source said.

     "There is a long way to go, and there needs to be a lot of offside

bargaining" before Weidmann can be ruled out as a future ECB president, the

second source added.

     Weidmann, whom the source described as "very coordinated with Merkel",

remains highly rated in Berlin, regardless of the "political circus" surrounding

him.

     A decision not to put him forward for ECB president cannot, therefore, be

taken as an indication his star is waning.

     Weidmann has been advised to stay "very close" to the Chancellor, both in

order to remain in the frame to replace Draghi, and to ensure continuing strong

German influence within the ECB in the event the job goes to someone else.

     Weidmann's eight-year term running Germany's central bank expires on April

30, 2019.

     But, in the absence of any obvious successor at the Bundesbank, Merkel may

prefer to keep him where he is for another few years, safe in the knowledge that

he will always wield heavyweight influence among his fellow central bankers in

Frankfurt.

     -- DID WEIDMANN CAMPAIGN START TOO EARLY?

     Where sources were in agreement was in their mutual bafflement at the

timing of the claims that he had lost the chancellor's support.

     Theories ranged from at anti-German "sabotage" from within the ECB (though

there is more support for Weidmann among southern countries than is publicly

acknowledged); to Merkel's supporters seeking to "cool", rather than quash

outright, speculation around the Bundesbank chief in order to give her greater

room for manoeuvre; to an attempt by an increasingly embattled chancellor to

reassert her authority at home and abroad.

     Yet there can be no doubt Weidmann's position now appears more complicated

than some might previously have assumed.

     A third source said: "Weidmann started his campaign too early, with his

supporters at the Bundesbank making overly premature overtures to national

capitals. If he still wants the ECB role, he will have to wait for another

chancellor".

--MNI Frankfurt Bureau; +49-69-720-146; email: luke.heighton@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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