5th Dec 2023

MEPs back Germany's Buch to lead ECB supervisory arm

  • Claudia Buch scraped through with 29 votes against 23 (Photo: Nils Thies)
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MEPs have softened their initial stance and approved the candidacy of German Claudia Buch to head the European Central Bank's supervisory arm, the so-called Single Supervisory Mechanism (SSM).

The secret vote, which took place this Wednesday (20 September) in the economic and financial affairs committee, was very close. There were 29 votes in favour, 23 against, and two abstentions.

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Italian Andrea Enria's term expires in December 2023 and in July MEPs unanimously proposed to ECB president Christine Lagarde that Spain's deputy central bank governor Margarita Delgado should replace him as head of the supervisory mechanism.

In a rare move, the ECB disregarded its recommendation and chose Claudia Buch, vice-president of the Deutsche Bundesbank.

"Given that Claudia Buch has proven to be very competent for the job, we have preferred to avoid an institutional crisis with the ECB," MEP Stéphanie Yon-Courtin (Renew Europe) said after the vote.

MEPs avoided a head-on clash with the ECB by not blocking their candidate with their veto power, but the hearing was not without hard questions to the German about the selection process for the post.

Since the opinion of MEPs had not been "fully" taken into account, Belgian MEP Johan Van Overtveldt (ECR) said, "it is strange to be labelled as a crucial ally".

He then asked Buch: "Do you feel comfortable with the fact that you are in the position you are in now, or is there any kind of uneasiness on your part?"

Socialist MEP Jonás Fernández has also asked her to double-check with her legal team whether it is compatible for her to continue in her Bundesbank post while running for a supervisory role that is supposed to be independent.

Despite pressure from several MEPs, the German decided not to comment on the procedure or the SSM protocol.

Instead, Buch focused her speech on setting out her priorities as potential head of the supervisory mechanism, highlighting her experience at the Bundesbank and, notably, her desire to continue working closely with other stakeholders, "particularly" with the Parliament.

Buch also underlined her intention to adapt the SSM to a changing environment, looking at how trends such as digitalisation or environmental risks affect the new competitive landscape, and to make the mechanism more proactive and reliable.

One German for another

Looking at the bigger picture, the change in chairmanship of the supervisory mechanism comes at a similar time to that of the European Investment Bank (EIB), which will need a replacement for Germany's Werner Hoyer from January 2024.

Favourite EIB candidates include Denmark's Margrethe Vestager, who has taken a break from her role as the Commission's executive vice-president for competition, and Spain's current finance minister and first vice-president, Nadia Calviño.

Former Italian finance minister Daniele Franco and Poland's Teresa Czerwinska are also in the running.

What does this have to do with the SSM chair?

It would be a question of geography, as Spain's Delgado and Calviño would be seeking to occupy two of the top financial/economic posts in the EU (a landscape in which other Spaniards hold the vice-presidency of the ECB and the presidency of the European banking authority).

To date, a woman has never held the post, but to become the EIB's eighth president, any of the candidates would need the support of at least 18 countries representing at least 68 percent of the EIB's capital.

The support of the major EU economies (including Germany, France and Spain, Italy and Poland itself) will therefore be key to the outcome of this race, which so far does not have a clear winner.

Meanwhile, the next step will be for the remaining MEPs to endorse Buch's leadership in plenary and for the Council to confirm it.

This is expected to happen in the plenary session in early October, undermining Vestager's geographical advantage ahead of the next meeting of finance ministers, where a decision could be taken on 16-17 October.

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