Weber steps down as Trichet warns of crisis

NEW Bundesbank president Jens Weidmann took the helm of the Eurozone’s most important national central bank yesterday amid warnings that the region’s crisis still has more rounds to come.

“We are still living in a very demanding environment. The crisis is not over,” ECB president Jean-Claude Trichet told Weidmann at the ceremony, in which Bundesbank chief Axel Weber, once a favourite to succeed Trichet at the ECB, stood down.

Instead, Italian central bank governor Mario Draghi looks all but certain to take Trichet’s post in October, with only Germany yet to signal support.

Some economists have predicted a more hawkish ECB after changeovers in its governing board this year, with seven members of 23 to be replaced.

Draghi promised to be hard on inflation at yesterday’s ceremony and said that the ECB’s emergency assistance programmes must end.

However, Bank of England governor Mervyn King warned that further rate rises could exacerbate debt levels.