Angela Merkel, chancellor of Germany, was due to meet on Friday with Axel Weber, head of the Bundesbank, and Wolfgang Schaueble, Germany’s finance minister, to discuss Weber’s withdrawal from the race for the top slot at the European Central Bank (ECB).

Weber had been seen as the front-runner upon Jean-Claude Trichet’s exit in October at the end of his term, but as AdvisorOne reported on Wednesday, he reportedly withdrew from the race. He has made no comment since the news broke.

According to Reuters, Merkel had been keen for a German to hold the post, since elections in seven German states are scheduled for this year. Weber’s hard line on fiscal policy was abrasive to other nations, but inspired confidence in Berlin that with him at the helm strict financial measures to solve the euro zone’s debt crisis would be enforced; Merkel has been outspoken in pushing for stricter measures for some time. The news that Weber had withdrawn from the race caused the euro to fall and the Euribor to rise; the Euribor has since backed off its record highs.

While Weber’s withdrawal from the race may soothe other euro zone nations, it has spooked investors, who are concerned that without such a firm hand at the helm the divided opinions of euro zone leaders may impair the ECB’s ability to initiate policies that will solve the debt crisis. In fact, on Thursday the ECB had to step in and buy Portuguese bonds for the first time in two weeks, as yield levels rose to euro-era highs.

While the choice of Trichet’s successor is seen as largely a decision by Merkel and Nicolas Sarkozy, president of France, Italy has been championing the candidacy of Mario Draghi, who holds a post on the governing council of the ECB and is governor of the Bank of Italy. Other contenders are Erkki Liikanen, Finland’s central bank head and a moderate in policy, and Yves Mersch of Luxembourg. However, Merkel may still attempt to see the slot given to a German; both her position at home and the perception that it is Germany’s turn to run the ECB could contribute to her decision.

It was reported in the Financial Times that Merkel might ask Weber to step down early as head of the Bundesbank to clear the way for a successor.