"The controversy has highlighted the uneasy relationship between Germany's government and its independent central bank, which, having ceded control of monetary policy to the European Central Bank five years ago, still has a supervisory role in Germany's commercial banking system.
Mr. Welteke's chances for redemption seemed dim from the start because of longstanding tension between the central bank and the government over the level of interest rates and the sale of the country's gold reserves...
Mr. Welteke did not go quietly. In a statement published on the Bundesbank's Web site within hours of his resignation, Mr. Welteke accused Mr. Schröder's government of compromising the Bundesbank's independence...
Another dispute between Mr. Welteke and Mr. Schröder was over the sale of the Bundesbank's gold reserves. With 3,400 metric tons of gold in its vaults, Germany is the world's second-largest holder after the United States. While Mr. Welteke in January proposed to set up a fund to distribute 5 billion euros from gold sales over five years for education and research purposes, Mr. Schröder said that was not enough to meet the country's spending needs. Germany is on course to breach the European Union's deficit rules for a third year.
