Frankfurt - The German central bank's executive board headed for a meeting Wednesday amid growing expectations that embattled Bundesbank president Ernst Welteke would have to step down in the uproar over his stay at a luxury hotel paid for by a private bank.
Ahead of the meeting, there was already speculation on a possible successor to Welteke, with pressure coming from Germany's political parties for a quick decision in order to clarify the situation and avert any further damage to the Bundesbank.
Among the names mentioned in press reports are Finance Ministry undersecretary Caio Koch-Weser, 59, and Bundesbank Vice President Juergen Stark, 55.
Sources in the German government in Berlin said that they expected an outcome on Wednesday which would bring clarity and also strengthen the Bundesbank as an institution.
Welteke, 61, came under new allegations in the press about a further trip, with the Bundesbank quickly issuing a denial.
The tabloid paper Bild reported that Welteke had accepted an invitation by a bank for a several-day stay in Vienna to attend the famous Vienna Opera Ball.
A Bundesbank spokesman called the report "false". Welteke had been invited to the Vienna Opera Ball by the Austrian central bank, but the invitation was not for a holiday at the bank's expense. The spokesman provided no further details.
Welteke has been under pressure since the story broke at the weekend that he and several members of his family had stayed in suites at the luxury Adlon Hotel in Berlin at the expense of the Dresdner Bank. The bill came to nearly €7 700 (R58 982).
On Tuesday, Frankfurt prosecutors launched an investigation into Welteke on suspicion that he had unlawfully accepted an advantage in connection with the hotel stay. Prosecutors were also investigating Dresdner Bank on suspicion of "granting advantages".
Welteke on Tuesday issued a new statement expressing his "deepest regret" about the incident and his initial reaction to it, while saying he had asked the Bundesbank executive board to investigate the matter.
"I most deeply regret that in connection with ... the Dresdner Bank invitation and my initial reaction to the public commentaries, the impression arose that I myself would not adhere to the high standards which the Deutsche Bundesbank, as an independent institution, is obligated to," Welteke said.
The statement was apparently referring to Welteke's remarks after the story broke in the weekly magazine Der Spiegel over the weekend when he appeared to try to brush the allegations aside.
"When somebody invites me to an event, I assume they are going to cover the costs. Why should I pay it myself?", Welteke told reporters Saturday at a conference in Ireland.
Then on Monday, Welteke issued a new statement seeking to defuse the scandal, saying that allowing Dresdner Bank to pay the bill had led to "criticism and misunderstandings", and that he had repaid the bill covering two nights at the hotel.
The Bundesbank has paid back a further two nights for Welteke in official travel expenses.
Welteke is a member of Germany's ruling Social Democratic Party (SPD) and the European Central Bank (ECB) governing council. - Sapa-dpa