Germany Must Consider How It Makes Bank Appointments
The decision by Germany's central bank to request that one of its governors be sacked after broadcasting racially-charged views sets the stage for a messy legal struggle on contract law, free speech and a subject many in Berlin heartily wish would disappear. How Germany winds down this taught scene from here will take careful message-management, and a team of really good lawyers.
Many see the decision, which must be endorsed by German President Christian Wulff, as too long in coming. Thilo Sarrazin's ideas on race first made news last year, but he provoked more of an outcry lately with a media blitz that accompanied his new book, which advances his theories on how the higher fertility rate of Muslim immigrants will erode Germany's economic potential and its collective intelligence in the long term. He also has offered his views on common genetic traits among Jews.
The request for Mr. Sarrazin's dismissal came after Jean-Claude Trichet at an ECB press conference, intended as a forum for discussing monetary-policy aims, issued an Olympic reprimand when asked about the Bundesbank board member's theories. Mr. Trichet said he was "appalled" and, meaningfully but without specifics, said he was confident that the German central bank would do what's appropriate.
That made Germany's PR disaster complete. An already agitated Bundesbank had been looking into sacking Mr. Sarrazin from its five-member board. The hang-up had been finding a way to do so without a thorny path through Germany's labor courts if Mr. Sarrazin contests the decision.
So far, he has given no sign of going quietly, insisting earlier that he's done nothing wrong and is sticking to his contract. Legal experts attest to Mr. Sarrazin having the law on his side if he fights an outright dismissal because he can't be faulted for his work at the bank.
At best, Mr. Sarrazin is practicing free speech, if only from the wrong pulpit. At worst, he is raising Germany's old ghosts and legitimizing some of the most uncomfortable ideas of Germany's extreme-right political groups.
The problem is Mr. Sarrazin's status as a senior German official. The Bundesbank is the crown jewel among Germany's postwar institutions, guardian of the deutsche mark and the core around which the ECB was built. Having one of its board members spinning racial theories is galling for his colleagues and cringe-worthy among Germany's political establishment.
The case is a new one for the German central bank, but might be taken as a prime opportunity to recast how the institution appoints its board. Unlike the Bank of England, for example, appointments to the Bundesbank's board aren't subject to parliamentary confirmation hearings. The executive board of the U.S. Federal Reserve also is given congressional scrutiny.