He will not attend this week's EU summit but German central bank chief Jens Weidmann will cast a long shadow, helping to determine whether the meeting delivers a breakthrough in the euro zone crisis or ends up falling short.

Weidmann could undermine any deal emerging from the Brussels summit if he feels it erodes the European Central Bank's capacity to deliver stable prices -- an inflation-fighting focus the Bundesbank feels a duty to defend.

He has been unrelenting in his insistence that governments, not the ECB on whose policymaking Governing Council he sits, solve the crisis by adopting tougher fiscal rules -- a step the leaders of France and Germany are trying to coordinate.

Germans look to the Bundesbank as a guarantor of their currency's value, so Chancellor Angela Merkel needs Weidmann's blessing to sell any summit deal at home.

Anything that comes back (from the summit) will have to stand up to the exacting standards he has set, said David Marsh, co-chairman of think tank OMFIF, pointing out that peripheral euro zone states could see their borrowing costs rise if Weidmann were to say: 'I don't like the deal'.

It would be in everybody's interest if they can earn a sense of perhaps grudging approbation from Mr Weidmann.

In a sign of the power the slender, softly spoken 43-year-old German central bank chief holds, U.S. Treasury Secretary Timothy Geithner made sure to visit him on Tuesday on his whistle-stop trip of Europe to lobby leaders for action.

Weidmann has quickly establish himself as a hardline central banker in the orthodox Bundesbank mould since he assumed the presidency of Germany's national central bank in May following the resignation of his predecessor, Axel Weber.

Weber quit in protest at the ECB's bond-purchase programme, a controversial measure it began last year in return for euro zone governments pledging they would set up a bailout fund to aid crisis-hit states.

With that fund, the EFSF, lacking the resources to convince markets it is the answer to the euro zone's woes, many investors and some governments are looking to the ECB to unleash the unlimited firepower it can muster to fight the crisis.

Weidmann has led resistance to pressure from the United States, Britain, and even euro zone member France for the ECB to do more by ramping up its purchases of bonds issued by crisis-hit states or even by lending to them directly.

He is concerned this would take the ECB into the fiscal policy arena, diverting its attention from monetary stability, while also reducing the incentive for governments to reform.


Despite his hardline stance, Weidmann has the political antennae to know when to compromise. These instincts were honed during the five years he spent as Merkel's economic adviser prior to taking the Bundesbank helm.

He is much more adroit than Weber and that means he is much better at building networks and coalitions, said Bert Ruerup, former head of the 'wisemen' council of economic advisers to the German government, who worked with Weidmann in that role.

Weidmann has, however, distanced himself from Merkel since moving to the Bundesbank and has been at odds with Berlin over its push for the private sector to be involved in shouldering the cost of bailouts.

A senior adviser to Merkel played down the idea that his hardline since landing in Frankurt has been a big surprise in Berlin: He's the head of the Bundesbank. There's a long tradition that he needs to defend.

The adviser also said contacts between Merkel and Weidmann had been reduced substantially in his new role.

He's not her adviser anymore. She can't just call down to Frankfurt and ask his advice. The roles have changed, he said.

In Frankfurt, Weidmann led a group of four ECB policymakers who opposed the reactivation of the bank's bond-purchase programme in August - extending it to protect Italy and Spain - and has often found himself in the minority on the bank's policymaking Governing Council.

Yet he feels he is gaining traction at the ECB with his views and does not entertain the idea of resigning like Weber or Juergen Stark - the ECB's German arch-hawk who is also quitting in what sources say is a protest at the bond programme.

Weidmann says privately that to quit would not help the Bundesbank make its point among the Eurosystem of euro zone central banks.

My daughter leaves the room when she doesn't get what she wants, but she still doesn't get what she wants. If I do the same, how does the Eurosystem look? he asked earlier this year.

New ECB President Mario Draghi has also pressed governments to agree a 'fiscal compact' and last week held out the possibility that the ECB could take stronger action to fight the crisis if political leaders do agree tighter budget controls at Friday's summit.

Weidmann has sounded less conciliatory but Ruerup believes that if EU leaders come up with a substantial deal on tougher fiscal rules at the summit, he could compromise and agree to the ECB buying more government bonds as a bridge to a more sustainable crisis solution.

There would have to be credible agreements that we are going into a fiscal union, he said. If that is certain, then there is room to live with a little bit of (bond) buying, if it just temporary and an exceptional situation.

If it is a bridge, he will probably go along with that, Ruerup added. But there have to be credible agreements.

(Additional reporting by Noah Barkin, editing by Mike Peacock)