Brussels, 04/01/2012 (Agence Europe) - On Tuesday 3 January, the European Central Bank's Executive Board shuffled its cabinet, so to speak, by appointing Belgium's Peter Praet as Chief Economist, a compromise decision because both France and Germany were after the job. Along with economic issues, Praet, who was formerly the director of the Belgian Central Bank, will be responsible for human
resources, budget and the Target 2 Shares programme, a common payment and delivery IT system for the whole of the eurozone.
Ever since the ECB was created, a German has had the job of Chief Economist (until now). Praet will take over from Jürgen Stark, who resigned in September 2011 in protest at the ECB's buying up of sovereign debt bonds, which began in May 2010. Berlin wanted to ensure that a German continued to hold the post, and put forward Jorg Asmussen to this end, but Asmussen will now be responsible for the bank's international relations and will assist the ECB president and vice-president at European summits and meetings of the Eurogroup and the ECOFIN Council. He will represent the ECB at Eurogroup working group meetings and the Economic and Financial Committee and will be responsible also for legal affairs, finding a new ECB site and the permanent ECB representation office in Washington.
France wanted Benoît Cœuré, its man on the ECB Executive Council, to get the job of Chief Economist. From 1 March 2012 onwards, Coeuré will be responsible for market operations, information systems, payment systems and market infrastructure, along with purchases of sovereign bonds of over €200 billion. In December 2011, he said that the bond purchase programme should be speeded up in the event of any deterioration of the public debt crisis in the eurozone, an approach always countered by the German government.
Between Tuesday 3 and Wednesday 4 January 2012, eurozone banks deposited a record high of €453bn at the ECB, which clearly illustrates the suspicion and mistrust on the interbank lending market. At the end of last month, the ECB issued €489bn-worth of three-year loans at 1% to eurozone banks. (MB/transl.fl)