Bundesbank chief considered quitting over ECB bond-buying - paper

BERLIN Fri Aug 31, 2012 8:19am BST

BERLIN (Reuters) - Bundesbank chief Jens Weidmann considered resigning several times because of his opposition to a new bond-buying plan by the European Central Bank but was persuaded by the German government to stay, Germany's Bild newspaper reported on Friday.

The German central bank declined to comment on the report and referred to comments by Weidmann in a newspaper interview at the weekend in which he said he could be most effective by staying in his post.

Weidmann's predecessor at the Bundesbank, Axel Weber, and German ECB board member Juergen Stark both resigned last year in protest at the bank's decision to buy the bonds of stricken euro states, because they believed this step violated the ECB's price stability mandate.

A former adviser to Chancellor Angela Merkel, Weidmann opposes ECB President Mario Draghi's plan to restart the bond-buying programme to support Spain and Italy.

News that Weidmann may have considered resigning heaps pressure on the Italian central bank chief ahead of a crucial ECB policy meeting next week at which he is expected to lay out the details of the bond buying plans.

Citing financial sources, Bild newspaper said Weidmann had mentioned his possible resignation to a small circle of people at the very top of the Bundesbank, but the government had urged him to stay.

Bild said Weidmann had decided against standing down for now and wanted to fight against the planned bond-buying programme at the ECB's September 6 policy meeting.

Sources said he felt he could contribute more this way to stability in the euro zone and to upholding the independence of the ECB.

Weidmann was asked in an interview with German weekly Der Spiegel at the weekend whether he planned to stay in his post despite his opposition to ECB policies.

"I can do my task best if I stay in office," he responded. "I want to work to ensure that the euro is just as hard as the mark was."

Draghi defended his own stance in an opinion piece in Die Zeit newspaper on Wednesday, saying that the ECB must employ "exceptional measures" at times to fulfil its mandate of delivering stable prices.

Weidmann has said the bond-buying plan risks breaking the bank's taboo against outright financing of governments.

(Writing by Noah Barkin and Alexandra Hudson; Additional reporting by Andreas Framke in Frankfurt; Editing by Louise Ireland)