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--No Formal Talks Yet, With Whole Range Of Appointments Seen Affecting Outcome
By Chris Mc Innes
LONDON (MNI) - It is premature for any formal discussions to take place to
find the successor to Mario Draghi as ECB president when he steps down in
October 2019, though a handful of compromise candidates have surfaced should
frontrunner Jens Weidmann and his Bundesbank orthodoxy no longer fit when
decision-day arrives, MNI understands.
Among the names circulating are alternative monetary policy hawk and
President of the Dutch central bank Klaas Knot, long-standing ECB Governing
Council member Erkki Liikanen, and increasingly-prominent Bank of France
Governor Francois Villeroy de Galhau.
Significant variables -- aside from the usual heavyweight political
power-broking at the heart of the European Union -- are filling other top posts,
most notably the European Commission presidency, and the political and economic
conditions prevailing at the time the fourth guardian-in-chief of the single
currency is selected.
Central to this will be the evolving state of the debate over Eurozone
structural and institutional reform designed to reinforce the resilience of the
single currency bloc against risks at home and abroad.
While the pace of reform is still seen as chiefly involving the two main
Eurozone heavyweights, France and Germany, the outlook is significantly clouded
by Chancellor Angela Merkel's weakened leadership and the prospects of Italy
being governed by an upstart populist and Eurosceptic coalition.
--BIG GENDER IMBALANCE
Another important factor in the mix is the pressure the ECB shares with
public bodies generally to appoint more women. An awkwardness for Weidmann is
that his accession would lead to the departure of compatriot Sabine
Lautenschlaeger, currently the only woman on the six-person Executive Board and
one of only two women on the entire 25-strong Governing Council (with Bank of
Cyprus Governor Crystella Georghadji).
Reports indicate that the ECB has been seeking to improve its gender
balance in top posts since 2013.
Priority is expected to be given to identifying the successor to the chief
economist on the ECB Executive Board when Peter Praet's term ends in May 2019.
There is also the question of picking a successor to Daniele Nouy when she steps
down as head of the ECB's regulatory arm -- the Single Supervisory Mechanism --
on 1 January next year.
MNI understands that formal talks to replace Draghi are not likely to begin
in earnest until the winter.
In the race to succeed Praet as Chief Economist, respected Irish central
bank governor Philip Lane is seen as the frontrunner. Ireland is the only
founding member of the single currency that has yet to secure a seat on the
Executive Board. But the dearth of women has led to speculation that his deputy
in Dublin -- Sharon Donnery -- could pip him to the post.
MNI cited German government and Eurosystem sources in a 1 March report
suggesting that Berlin's backing for two candidates from the Iberian peninsula
to secure the prime Eurozone positions of ECB vice president and Eurogroup head
would assist Weidmann's chances of succeeding Draghi. But the Eurosystem source
stressed that the manoeuvre does not mean that the Bundesbank president has the
ECB top job in the bag.
--MNI London Bureau; tel: +44 203-586-2225; email: firstname.lastname@example.org
--MNI Frankfurt Bureau; +49 69 97782671; email: email@example.com