Bundesbank president under pressure to resign

A Bundesbank spokesman has said that bank president Ernst Welteke is "no longer ruling out resignation" as the controversy over corporate hospitality he accepted gathers momentum.

Mr Welteke is in trouble for allowing Dresdner Bank to pay a €7,661 hotel bill incurred by himself and his family.

The Bundesbank is one of the bodies that regulates the German banking market, and its president's acceptance of this gift has led to widespread accusations of a conflict of interest.

News broke at the weekend that Mr Welteke had spent four nights at Berlin's luxury Adlon Hotel with his wife, two sons and a girlfriend of one of the sons.

The stay had been courtesy of the Dresdner Bank.

"I deeply regret that in connection with the invitation by Dresdner Bank and my first reaction to public commentary about it, the impression has arisen that I would not abide by the high standards to which the Bundesbank is obligated as an independent institution," said Mr Welteke in a statement yesterday.

The president's initial reaction when the scandal broke was to dismiss it, accusing the media of "criticism and misunderstanding."

This approach backfired however and lead to further outrage amongst the German public.

The country's media has turned on Mr Welteke this week, with populist paper Bild cheekily offering to pay for the president and his family to spend two weeks in Majorca - as long as he agrees to resign.

Support for Mr Welteke has also fallen away amongst the political establishment, with Finance Minister Hans Eichel commenting: "According to our code of conduct such things aren't possible."

Mr Welteke also sits as German representative on the governing council of the European Central Bank.

According to the ECB ethics code, governing council members must not accept gifts "in excess of a customary or negligible amount."

The Financial Times reported today that, if the president is forced to resign, likely successors are thought to include deputy Finance Minister, Caio Koch-Weser and Ingrid Matthaus-Maier, a board member at development bank KfW.