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The decision to succeed Mario Draghi as president of the European Central Bank is still a year away, but the race for positions is already under way.
The 19 countries that use the euro are preparing for a delicate political dance will decide who will divert the economy of the euro zone years of easy money policies. The favorite, Jens Weidmann, the conservative president of the German central bank, risks becoming a lightning rod for criticizing the nation's domination of the $ 14 trillion bloc
The ECB has recently received a legal opinion that 39, a French member of his executive board, Benoît Coeuré, could be elevated to the presidency, people familiar with the case said, adding another potential candidate to the pool. Many European officials have badumed that members of the executive board are excluded under European law
Governments choose the president of the ECB, and the decision will likely involve a compromise crafted on the other main jobs of the Union European Union, including the head of the executive. EU officials say that they believe that Germany has a strong claim on the work of the ECB, in part because a German never held it.
Yet legal discussions highlight the challenge facing European leaders as they prepare to appoint a successor, an Italian who is the third president of the ECB in his two-decade history and has played a dominant role in navigation on the continent through its debt crisis. Unlike the presidents of the Federal Reserve, it can not be renewed after the end of his eight-year term in October 2019.
The development – which has not been reported before and seems to have been guarded by a relatively small circle of officials – highlights how the monetary union is still a work in progress more than two decades after the creation of the ECB.
It could complicate the rise of Mr. Weidmann, who strongly opposed the signature policies initiated by Mr. Draghi, including large-scale bond purchases. have been credited with saving the eurozone from collapse. At a minimum, the discussions suggest that Mr Weidmann is far from inevitable.
Several members of the ECB's 25-member rate-setting committee are skeptical, or downright hostile, privately, to be led by someone who has frequently broken with the bank's tradition of decision making by consensus, and even testified against the ECB in a German court for a bond purchase program
"Draghi's successor could reshape the ECB". BlackRock Inc. But "the choice is pretty narrow." Many investors have asked the question: who else can it be except Weidmann? "
There are 18 other national bank governors but none stands out as an obvious alternative.
This put the emphasis on the six- person executive board. EU law stipulates that the members of the board of directors, which includes the president, have a non-renewable term of eight years
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A loophole that could allow board members such as Mr. Coeuré, former head of the French Treasury whose mandate ends next year, to fulfill a new mandate of eight years as President of the ECB. "Although the ECB has no official role, Mr Draghi could be consulted given his dominant role in managing the bloc through his debt crisis and could propose someone like Mr Coeuré as a viable alternative if Mr Weidmann is considered too contentious
The ECB and the Bundesbank refused to comment
"Although there is no precedent on this issue, resign board as a board member to be later named chairman would seem to be possible from a legal point of view, "said Pieter Van Cleynenbreugel, professor of European law at the University of Liege in Belgium.
The executive office would seem like an ideal training ground. In the United States, the last three Presidents of the Federal Reserve have sat on the Board of Governors, its equivalent of the Executive Board of the ECB. Headquarters posts place council members close to Mr. Draghi. Mr. Coeuré, in particular, is widely regarded as one of Draghi's key lieutenants, serving as the ECB's point of contact with his international counterparts and financial markets.
While supporting Mr. Draghi's easy money policies, Mr. Coeuré recently called for the removal of them soon. Like Mr Weidmann, he comes from a large country considered part of the conservative north of Europe, which would help to create a balance with the ECB's Spanish Vice President, Luis de Guindos. A strike against Mr. Coeuré is that his compatriot Jean-Claude Trichet occupied the first position of the ECB before Mr. Draghi.
Although the four other members of the executive council could theoretically become president according to the thought of the lawyers, the councils seem to apply mainly
German Chancellor Angela Merkel, did not indicate whether she was going to support the claim of Mr Weidmann, his former economic adviser, who could demand politically sensitive concessions to other countries on issues like a common Eurozone budget. 19659002] Ms. Merkel has been politically weakened by a fight within her government coalition on migration, but it is not clear whether this will hurt or help Mr. Weidmann's chances. The Chancellor may no longer be able to resist the demands of her conservative allies, who would like to see a German at the head of the central bank.
No candidate has declared himself openly interested. But a handful of officials flirted with the idea while strengthening their pan-European credentials.
In a lengthy interview with German public radio on Sunday, Mr Weidmann expressed his willingness to badume new responsibilities within the ECB.
It would be strange if I were to say … look, I prefer to sit on the sidelines and criticize monetary policy, instead of helping to shape it if the opportunity arises, "he said. He also mentioned his taste for Italian cuisine, his Italian dog and his work with French President Emmanuel Macron, who will have a say in appointing the next head of the ECB to head the country. But if Mr Weidmann has toned down his criticism of the ECB's policies in recent months, he also said he would not change his position to win the euro zone. highest post.
Weidmann "does not seem the most obvious candidate," said a senior finance ministry official from the eurozone. "Doubts were expressed about how someone 39, one who has often voted against the consensus could be able to federate points of v in the future council. "
Other potential candidates include Klaas Knot, the Dutch central banker; Erkki Liikanen, who is retiring this month as Finland's first central banker; and Governor of the Irish Central Bank, Phillip Lane. Another possibility is the governor of the Central Bank of France, Francois Villeroy de Galhau, who has family ties with Germany and speaks good German.
Coeuré declined to comment on this article, but by speaking on French radio in June, he declined to exclude the race for the highest position. "Let's go back to that in six months or a year."
Source: The Wall Street Journal
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