FRANKFURT—Germany's top central banker has dropped out of the race to become the European Central Bank's next president, European officials said—a move that throws the search for a new chief into disarray at a time when European authorities are trying to bring the euro zone's debt crisis under control.
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Axel Weber, long seen as a leading candidate to succeed the ECB's Jean-Claude Trichet, appears to have taken himself out of contention.
German Bundesbank President Axel Weber, who was widely seen as the favorite to succeed ECB President Jean-Claude Trichet when his term ends in October, has told Germany's government he is no longer seeking the job, these officials say. Mr. Weber now "has other plans," one of these officials said.
Those plans will likely involve Mr. Weber's leaving the Bundesbank soon and possibly taking a top position at Germany's biggest private-sector bank, Deutsche Bank AG, according to people familiar with the matter. Deutsche Bank is expected to reshuffle its top management to replace Chief Executive Josef Ackermann.
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No agreement has been reached, but under one scenario, Mr. Weber could become Deutsche Bank's next chairman, while the bank's investment-banking head Anshu Jain ascends to CEO, close observers of the bank say.
Deutsche Bank declined to comment. The Bundesbank said Mr. Weber wouldn't comment.
As Bundesbank president, Mr. Weber votes on the ECB's governing council, made up of the heads of the 17 central banks of the euro countries plus a six-member executive board.
Mr. Weber's apparent withdrawal from the race is a painful blow for German Chancellor Angela Merkel, who was hoping to install Mr. Weber—a trusted if controversial ally—at the ECB's helm as part of her strategy to bolster confidence in Europe's 12-year-old single currency. Berlin is pushing for an overhaul of the euro zone's economic governance, to bring the bloc more in line with Germany's focus on fiscal prudence, inflation-fighting and business competitiveness.
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Having a German at the head of the ECB would have helped Ms. Merkel convince skeptical domestic voters that the euro serves Germany's interests, despite the growing cost of having to come to the aid of financially stricken euro members such as Greece and Ireland.
On Wednesday morning, amid a flurry of media reports on Mr. Weber's change of plans, Ms. Merkel spoke to Mr. Weber by phone, according to her spokesman, who declined to provide details of the talk. Top German government officials were angered and mystified at Mr. Weber's decision, according to people familiar with the matter.
Mr. Weber's clashes of policy and personality with other euro-zone central bankers appear to have undermined a plank of Ms. Merkel's strategy. Mr. Weber, a outspoken 53-year-old former economics professor, has alienated many of his colleagues on the ECB's governing council in the past year by bluntly criticizing the central bank's handling of the euro-zone crisis, in particular its decision to buy bonds of struggling governments.
Who's Next
Contenders for the European Central Bank's presidency
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Mario Draghi, governor at Bank of Italy and chairman of the Financial Stability Board, is well-qualified but his nationality could be a minus: Italy is one of Europe's fiscal laggards.
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Yves Mersch, governor of the Central Bank of Luxembourg, is a candidate from a smaller country who is seen as relatively hawkish on irate policy. He has served on corporate boards.
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Erkki Liikanen, governor of the Bank of Finland, was elected to Finland's Parliament at age 21. He is also a former European Union budget commissioner.
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Klaus Regling, the German CEO of the European Financial Stability Facility, has held posts at the International Monetary Fund and the European Commission.
Several other ECB board members viewed Mr. Weber's public attacks on their collective decisions as a breach of central-banking etiquette that raised questions about whether he would be suited to leading the consensus-based institution.
Mr. Weber, who said publicly last year that he would rather speak his mind than be diplomatic, appears to have concluded that even if European governments' agreed to give him the job, he wouldn't enjoy the full support of Europe's central-banking fraternity as ECB head.
Although some other Bundesbank officials share Mr. Weber's reservations about ECB bond-buying—fearing that such activities could fuel inflation and erode the central bank's political independence—he has taken a particularly hard line. Many analysts say Mr. Weber's career background as an academic, rather than a central banker, made him an outlier at the Bundesbank.
"Weber prefers to make policy with a lot of facts but very little diplomacy," says Marco Valli, chief euro-zone economist at UniCredit in Milan, adding, "It could be a good characteristic in the private sector, but not necessarily at the ECB."
The search for a successor to Mr. Trichet, a widely respected 68-year-old Frenchman, has now been thrown open, analysts say.
Italy's central-bank governor Mario Draghi, with his broad financial experience, is probably the best-qualified candidate, many analysts say. But politically, Mr. Draghi may have the wrong passport at a time when Southern European nations are at the heart of the euro zone's debt crisis, and Northern European countries—led by Germany—seek more influence.
"The big problem for Draghi is that it's not easy to see the ECB being led by an Italian when you already have a Portuguese vice-president and when we all know that the debt crisis is far from over," Mr. Valli said.
Luxembourg's central bank head Yves Mersch and Finnish central banker Erkki Liikanen are also contenders for the top job, ECB watchers say, thanks to their anti-inflation views and that they come from nations that aren't caught up in the debt crisis.
Germany's only other potential candidate for the ECB leadership, say analysts, is Klaus Regling, a former International Monetary Fund official who heads Europe's rescue fund for struggling euro-zone governments. But Mr. Regling lacks a background in central banking and is thus seen as an outside bet.
French and Italian officials argued on Wednesday that European leaders should focus on the individual candidate, not on nationality.
Mr. Weber's withdrawal is unlikely to have a major effect on ECB policies on interest rates or the debt crisis, analysts said. The ECB, modeled on Germany's Bundesbank and based in Frankfurt, focuses on keeping inflation close to but under 2% and has a reputation for being tougher on inflation than other major central banks, including the U.S. Federal Reserve. Germany and other Northern European countries would likely veto any candidate who might loosen the bank's anti-inflation stance.
Despite Mr. Weber's abrasive style, he was viewed as the front-runner, thanks to Ms. Merkel's strong backing at a time when Germany's financial muscle is increasingly making it the most politically powerful nation in the euro zone.
His candidacy raised the prospect of more-open dissent at the ECB, which could have unsettled financial markets, analysts say. However, without Mr. Weber, the ECB could be left with a less forceful presence when Mr. Trichet retires.
Mr. Weber "is quite a heavy hitter, as is Trichet, and it's hard to imagine they will find another candidate who will have that same name reputation," said Stefan Gerlach, professor at Goethe-University Frankfurt.
The choice of the next ECB president isn't expected to be made until close to Mr. Trichet's retirement date, as European leaders don't want to undermine the Frenchman's authority by naming his replacement early. Nevertheless, if the euro-zone debt crisis flares again, European leaders may be forced to settle the issue sooner.
—Laura Stevens and Alessandra Galloni contributed to this article.
Write to Brian Blackstone at brian.blackstone@dowjones.com, Geoffrey Smith at geoffrey.smith@dowjones.com and Marcus Walker at marcus.walker@wsj.com
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