Wednesday

29th Jun 2022

Eurogroup starts process to pick new ECB chiefs

  • Spain's de Guindos, the Eurogroup's longest-serving member, is favourite to become ECB vice-president (Photo: Council of the EU)

The future of the eurozone's monetary policies will be partly shaped on Monday (19 February) when eurozone finance ministers give their preference on who should be the next vice-president of the European Central Bank (ECB).



The ministers have to choose between two candidates: their Spanish colleague Luis de Guindos and the governor of the Central Bank of Ireland Philip Lane.

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  • Irish central bank chief Lane has the backing of MEPs (Photo: centralbank.ie/flickr)

"These are two excellent candidates," Eurogroup president Mario Centeno said last week.

De Guindos, the only politician to run for the post, has been the favourite for many months.

As finance minister in the Spanish conservative government since 2011, he is the longest-serving member of the Eurogroup - and ran to be its president in 2015. He worked previously at Lehman Brothers bank and the PriceWaterhouseCoopers consultancy firm.

De Guindos has the public support of several countries, including Centeno's Portugal. According to Spanish daily El Mundo, he is also supported by France - a crucial backing to secure the Eurogroup's endorsement.

De Guindos' competitor, Ireland's Lane, benefited from a political momentum last week after a hearing at the European Parliament.

After listening to both candidates, MEPs from the economic and monetary affairs committee (Econ) found that Lane's performance was "more convincing".

"Some groups expressed reservations for minister De Guindos appointment," the committee's chairman, Roberto Gualtieri, said in a statement.

"Lane has shown himself to be a distinguished and proven economist. De Guindos, on the other hand, as a politician who would like ... a top job at the ECB," Green MEPs Sven Giegold noted, summarising the arguments about the two candidates.

In a tweet addressed to Centeno last week, socialist MEP Pervenche Beres, an influential member of Econ, called on the Eurogroup to "think twice about the good choice".

EU officials point out however that the EU parliament's need only to be consulted about the appointment. The final say will be for EU leaders, after their finance ministers issue a recommendation.

The recommendation will be adopted on Tuesday, when all 28 ministers meet. But Monday's discussion between the eurozone's 19 ministers is were the decision will be prepared.

The appointment of the new ECB vice president, in replacement to Portugal's Vitor Constancio whose term ends in June, is the first move in a process to renew the top echelon of the ECB.

Opening door to Weidmann?

ECB president Mario Draghi will leave in November 2019, and many consider that if someone from the south is appointed ECB vice president, the next president will have to come from the north.

 That could leave the door open to Jens Weidmann, the head of the Bundesbank, Germany's central bank, or an ally of him.


Weidmann is a staunch critic of Draghi's monetary policies, with low interest rates and a massive assets buying programme to pump money into the economy.


Many fear that with De Guindos - who implemented Spain's austerity policies - and Weidmann, the ECB would become less accommodating and more strict on fiscal policies.

Other consider that De Guindos' appointment to the ECB executive board would create a precedent, and weaken's the body's independence towards eurozone governments.


In addition to the president and vice-president, three other members of the six-strong board will have to be replaced in the next two years, leaving several opportunities to reshape the ECB's policies.


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Opinion

The euro — who's next?

Bulgaria's target date for joining the eurozone, 1 January 2024, seems elusive. The collapse of Kiril Petkov's government, likely fresh elections, with populists trying to score cheap points against the 'diktat of the eurocrats', might well delay accession.

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