Germany put forth its deputy finance minister Joerg Asmussen to join the European Central Bank's six-member executive board, and said it and France would propose major governing reforms this week for the 17-nation eurozone.
The two announcements, made Saturday on the sidelines of Group of Seven developed nations' meeting in Marseille, France, could have a lasting impact on the way the currency union handles its crippling government debt crisis.
If Asmussen gets approval from the other 16 euro nations, he will succeed Juergen Stark on the ECB's six-member executive board at the end of the year, German Finance Minister Wolfgang Schaeuble said.
Stark unexpectedly resigned from the board Friday in a move analysts said was triggered by disagreements over the ECB's bond buying program to stabilize interest rates for struggling nations Italy and Spain. The announcement of Stark's departure sent stocks and the euro tumbling, as it raised only more questions over the eurozone's crisis strategy.
Stark was one of only a handful of ECB decision makers who opposed the bank's massive purchases of Italian and Spanish government bonds in recent weeks.
Supporters of the purchases argue that they helped to support struggling governments during unwarranted market selloffs and buy time for the eurozone to find a more lasting solution to its debt troubles. But opponents like Stark have warned that they saddle the central bank with risky investments that could hurt its independence and stability if one of the aided governments defaults.
Asmussen, who sat next to Schaeuble at the news conference, declined to comment on whether he supports the ECB's bond purchases.
Unlike Schaeuble, Asmussen is a member of the opposition Social Democrats and survived the 2009 handover of the German finance ministry to the conservatives because of his experience in European and financial policy. He had joined the ministry in 1996 and quickly rose through the ranks. Generally, the Social Democrats support loser monetary policy and more help for the eurozone's weaker members.
However, like the current Bundesbank President Jens Weidmann, Asmussen studied under former Bundesbank President Axel Weber _ both forceful opponents of the ECB's bond buying program.
At the same news conference, Schaeuble also said he and French Finance Minister Francois Baroin plan to make new proposals on eurozone governing at a meeting with their counterparts Thursday in Wroclaw, Poland.
The governance of the eurozone, especially on fiscal and economic issues, has moved into the center of the debate over Europe's government debt crisis. So far Greece, Ireland and Portugal have needed hundreds of billions of euros in rescue loans, and investors are now deeply concerned over the finances of much larger eurozone members Spain and Italy.
Schaeuble did not elaborate on his plans. However, last month, German Chancellor Angela Merkel and French President Nicolas Sarkozy called for a "new economic government" for Europe.
Under that new regime, eurozone leaders would meet at least twice a year under European Union President Herman Van Rompuy. Merkel and Sarkozy also called for all eurozone nations to enact constitutional amendments requiring balanced budgets.
Both leaders have ruled out so-called eurobonds _ debt secured by all 17 euro countries _ which many analysts tout as the quickest fix to continuing market concerns over the solvency of the eurozone's weaker members.
But in an interview with German daily Tagesspiegel, Merkel said the European Union should not shy away from changing its treaty to create closer coordination of fiscal and economic policies. She added, however, that was part of a longer-term strategy and that the currency union should first work within its existing treaty.
Changing the EU treaty could take years, since it requires unanimous approval from all member states at a time when many are growing more euro-skeptic. Yet a growing number of economists and policymakers are arguing that a closer union is the only way to ensure the euro's survival.
Asmussen's imminent departure from the Germany finance ministry will also affect the Eurogroup Working Group, high-level officials who prepare most of the decisions in the eurozone. The group will lose one of its most experienced members just as the currency union is preparing for an unprecedented shake-up.
"Stark's replacement with Asmussen might open space for a more reasonable discussion on further bond purchases by the ECB or the introduction of eurobonds, both of which could help stem the crisis," said Sony Kapoor, managing director of Re-Define, a think tank that supports financial market reform. "It will, however, create a gap at the German finance ministry, which has lost some senior figures in the past year."
If Asmussen's move to the ECB is approved, he will be the second influential German government official to take on a key role in European monetary policymaking this year. Bundesbank chief Weidmann was Merkel's top economic adviser until his appointment in May, raising some questions about the institution's touted independence. However, since then, Weidmann has been critical of government positions on several occasions.
Proposing Asmussen for the ECB post "was probably hardest for me," Schaeuble said. "We have a lot to do. We urgently need him."