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Nagel with Federal President Steinmeier on his appointment as Bundesbank President: "Exceptionally uncertain"
Photo: POOL / REUTERS
The new President of the Bundesbank, Joachim Nagel, warns the European Central Bank (ECB) to be vigilant because of inflation.
He said so at his inauguration, four days after his appointment.
He currently sees the danger "that the inflation rate could remain elevated for longer than currently expected."
Monetary policy must "be on guard in any case".
The medium-term price outlook was "extraordinarily uncertain," said Nagel.
The inflation rates of up to five percent in the euro area, and even higher in Germany, worried many people.
People with lower incomes are often particularly affected by inflation.
In order to maintain the population's confidence in the stability of the value of money, central banks should "maintain their independence and interpret their mandate narrowly," said Nagel.
If price stability required it, the Council of the ECB had to "act and adjust its monetary policy course".
He himself wanted to build on the previous line of the Bundesbank and his predecessor Jens Weidmann.
The Bundesbank has always drawn attention to inflation risks at an early stage.
Finance Minister Christian Lindner (FDP) described Nagel's assumption of office as a “decisive moment”.
The Bundesbank has built an international reputation for itself with its stability-oriented monetary policy.
Price stability, according to Lindner, is an "indispensable prerequisite" for the functioning of the market economy.
His predecessor also criticized the ECB
The 55-year-old Nagel was appointed the new President of the Bundesbank by Federal President Frank-Walter Steinmeier on Friday.
The federal cabinet had decided to appoint Nagel to the head of the German central bank in December.
Weidmann had announced in October that he would leave his post early at the end of the year "for personal reasons".
He had repeatedly criticized the ECB's loose monetary policy.
The budget and financial policy spokesman for the CSU regional group, Sebastian Brehm, called on Nagel to advocate an "overdue monetary policy correction" by the ECB.
A return to stability policy is necessary.
Otherwise the euro zone could "get into serious economic difficulties."
As President of the Bundesbank, Nagel is Germany's representative on the Council of the European Central Bank, where he is jointly responsible for monetary policy in the euro zone.
jlk / AFP
