Wolfgang Proissl calls on the Bundesbank to give up its dissident role in the eurozone

In a commentary in Financial Times Deutschland, Wolfgang Proissl calls on the Bundesbank to give up its dissident role if it wants to regain relevance within the Eurosystem. The German central bank must realize that it is isolated with its rejection of the ECB's bond purchasing program and that it has failed to leave its mark on important eurozone decisions throughout the crisis. The Bundesbank will only be able to regain influence if it re-engages with the other central banks, financial market actors and politicians in order to form coalitions. Bundesbank president Jens Weidmann and Jörg Asmussen, the designated successor for the ECB chief economist Jürgen Stark, are both experienced political dealmakers and should be in good position give the Bundesbank an new start.

According to Trichet, the ECB has performed with flying colors since the birth of the euro as a "fiercely independent" institution divorced from the whims of EU governments -- even during what he calls "the worst crisis since WWII."

"We have delivered price stability over the first 12 years and 13 years of the euro -- impeccably, impeccably," Trichet emphasized. "I would like very much to hear the congratulations for an institution which has delivered price stability in Germany" at a level which is "better than what has ever been obtained in this country over the last 50 years."

He also called controversial interest rate hikes earlier this year "appropriate" given the inflationary situation at the time, although he announced that the ECB now sees inflation risks as balanced.

while at the same time the Bundesbank believes the sky is about to fall on our collective heads because of the supposedly recklessly inflationary policies of the ECB, while people to the left of the so-called-Socialdemocrat Social Liberals scream bloody murder about neohooverism, deflation and depression.

Economics is politics by other means