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Last Updated: Thursday, 8 April, 2004, 16:23 GMT 17:23 UK
Berlin steps into Bundesbank row
Bundesbank chief Ernst Welteke
Will Ernst Welteke be forced to resign?
The German government has embroiled itself in a row over the country's central bank chief and a potentially unethical hotel bill.

Bundesbank chief Ernst Welteke stepped down temporarily after it was revealed that he accepted a stay in a luxury hotel from a bank he regulates.

But the Finance Ministry now says that is not enough to protect the bank's "high public reputation".

The move is being seen as a barely-veiled demand for Mr Welteke to resign.

'Necessary conclusions'

The government cannot sack Mr Welteke, since the Bundesbank's independence is enshrined in law.

But a spokesman said Mr Welteke should "draw the necessary conclusions" from the furore surrounding his predicament.

A "swift and unequivocal resolution" was required, the spokesman said.

Mr Welteke's temporary replacement, Juergen Stark, said the government had over-stepped its bounds.

"We have already been compromised by the fact that... certain expectations have been expressed, which one could absolutely consider damaging to the Bundesbank's independence," he told German television.

Sanctions

The row over the 7,600-euro (5,000; $9,200) bill started earlier this week, after a news magazine revealed Mr Welteke and his family allowed Dresdner Bank to pay their the cost of their stay in Berlin's top Adlon Hotel for the euro's launch at the start of 2002.

The furore has caused Mr Welteke, who earns 350,000 euros a year, to reimburse half the bill, while the Bundesbank picked up the rest on the basis that he was there in part for reasons of work.

The Bundesbank will now adopt the code of ethics of the European Central Bank (ECB).

The bank hopes the reimbursement of the bill, and the move to incorporate the ECB code of behaviour, will draw the sting of the row.

But some observers say that may not be enough - not least because Mr Welteke, as a member of the 18-strong ECB Executive Board, is already subject to the code in question.

In any case, they say, the code is vague and offers no sanctions for breaching its stipulations.


SEE ALSO:
Bundesbank puts boss 'on leave'
07 Apr 04  |  Business
Bundesbank to probe 'perk' boss
06 Apr 04  |  Business
Bundesbank boss in row over perks
05 Apr 04  |  Business
Germany puts price on euro switch
19 Jan 04  |  Business
EU praises euro changeover
02 Jan 02  |  Business
The fall and rise of the euro
05 Jan 04  |  Business


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