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By David Thomas and Silvia Marchetti
     LONDON (MNI) - France, Italy and other southern eurozone states look set to
block the appointment of Bundesbank President Jens Weidmann as the next
president of the European Central Bank, despite speculation Berlin and Paris
were set to broker a deal at a summit next week, sources have told MNI.
     It is understood French officials take the view that even securing the
Commission or Council presidencies for one of their nationals would not be
sufficient compensation for having a monetary hawk like Weidmann leading the
ECB. And, while French objections to Weidmann have been sharpened by recent
tensions with Germany over strengthening euro governance and differences over
Brexit, they are not alone in their reservations.
     "Better have a German lead the Commission than the ECB. Weidmann has so far
proven to be way too hawkish and Germany certainly can't set the example in
terms of handling banking regulation," one Italian government source said.
     Even some in the Eurosystem believe Weidmann faces an uphill struggle,
given the strength of feeling against him in southern member states. This is
despite a recent surge of confidence in German government circles that Weidmann
could be successful in his ECB bid now that Germany's candidate for the
Commission presidency - EU Parliament Centre-Right Leader Manfred Weber - has
been all but ruled out.
     "I think there will be sufficient opposition against Weidmann from France,
Italy and some others to stop him from getting the job," one Eurosystem source
said.
     An EU official told MNI that, given the delicacy surrounding the nomination
negotiations, anyone at the "extremes" has to be ruled out of the running.
     "He's too hawkish, an extremist. We need someone consensual, someone
everyone can live with," the EU source said.
     "Frankly, I don't think he ever stood a chance," the source added.
     --A DANGER TO THE EURO?
     The Italian official suggested Weidmann's nomination could even prove
terminal for the euro: "Is it better to have a French or a German at the helm of
the ECB? Depends on how quickly you want to see the EU break down."
     "Whoever succeeds Draghi will also have a major impact, even if indirectly,
on our fiscal dialogue with Brussels," the official said.
     Sources also suggested France's favoured candidate for the Commission, EU
Chief Brexit Negotiator Michel Barnier, is likely to be unacceptable to the
Parliament's biggest political bloc as a substitute for Weber.
     Nor can Weber be completely ruled out, as it seems he has quietly reached
out to France, making sympathetic noises on key policy demands. He has also
apparently persuaded the Italian government he is still worth considering.
     "Weber is a good candidate for the EC top job. PM Conte met with Weber ...
in Rome and had a positive chat, we share a few points," one Italian source
said.
     That said, Weber's chances are viewed more dimly in Brussels and French
President Emmanuel Macron has been so forthright in his rejection of his
candidacy that officials believe it will be impossible for him to get back into
the race.
     These emerging constraints make it likely the EU's top jobs could end up
shared mainly between smaller countries, although striking the right balance
between regions, political groups and genders will prove challenging.
     One source noted, for instance, that if Denmark's Margrethe Vestager or
Netherlands' Frans Timmermans gets the Commission, that would make it hard for
Finland's Olli Rehn to take the ECB.
     EU President Donald Tusk is currently doing the rounds of EU leaders,
trying to scope out room for compromise, but sources say he will only reveal his
proposed candidates behind closed doors at the summit dinner next Thursday in
Brussels.
     Some sources are sceptical next week's summit will bring a breakthrough,
and one suggested there was now a "relatively high probability" the EU will need
to call an extra summit in July to broker a deal on top jobs.
--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com
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