In a release of a planned speech, Professor Reimut Jochimsen, a Bundesbank council member from North Rhine-Westphalia, argued that the potential for a realignment of currencies within the exchange rate mechanism 'had been repressed for many years for prestige reasons.' The markets saw this as a call for weaker currencies, such as sterling, to devalue against the mark.
The remarks provided grist for a growing number of Bundesbank critics, such as the German magazine Der Spiegel, who think it is getting too big for its boots. They say it is trying to provoke a realignment of European currencies to scupper moves towards European monetary union, when it would lose its unique role.
Some of its hawkish council members - notably Lothar Mueller from Bavaria - certainly think EMU is a French plot to undermine the mark. It is no secret that the Bundesbank council is not keen on the timetable for introducing EMU and would like a revaluation of the mark.
But the idea that the independent Bundesbank would undermine the Bonn government is dismissed by European central bankers, who think the Jochimsen episode was a cock-up, not a conspiracy. Immediately after the speech was released, the Bundesbank denied it wanted a realignment. Professor Jochimsen, moreover, was not one of the hawks favouring a rise in the German Lombard rate last month, which would have put intense pressure on several European currencies.Reuse content