Donohoe optimistic about Philip Lane’s ECB prospects despite strong Spanish candidate

Republic’s Central Bank chief faces Spain’s Luis de Guindos in race for European post

Spanish economy minister Luis de Guindos. Photograph: Angel Diaz/EPA

Spanish economy minister Luis de Guindos. Photograph: Angel Diaz/EPA

 

The Minister for Finance Paschal Donohoe remains optimistic about Central Bank Governor, Philip Lane’s chance of landing the European Central Bank (ECB) vice presidency despite the emergence of another strong candidate.

Spain proposed Economy Minister Luis de Guindos to be the next vice president of the ECB, attempting to win back a seat on the Executive Board with a political nomination.

The Government nominated Mr Lane last month. Speaking after addressing employers’ group Ibec on Tuesday, Mr Donohoe said he always expected other candidates for the prestigious role.

“I was very much aware that Spain also had ambitions to be represented on the European Central Bank,” he added.

“What I will be doing is focusing exclusively on the qualities of Governor Lane, pointing to his track record as a central banker, both for Ireland and what he has achieved within the European Central Bank.

“In any competition there are always other competing candidates that will be putting their best foot forward too. We’ll be doing the same, Philip is an excellent candidate and I believe he will do a superb job within the European Central Bank.”

Often portrayed as success stories for the European periphery, both the Republic and Spain want to beef up their presence at European institutions. The Republic has never been on the ECB’s Executive Board, while Spain lost its seat in 2012.

Wednesday is deadline day for nominations, and euro-area finance ministers will vote on the candidate on February 19th. The process will also include a hearing in the European Parliament.

Although lawmakers can’t block the decision, they can object and cause delays. They previously held up Yves Mersch’s appointment to the board because of the lack of women at the highest level of the ECB. The six-member body still only includes one woman, though another three positions - including that of the president - will become vacant by the end of 2019.

When it comes to Mr de Guindos, some lawmakers might also argue he is too political for the ECB job, which should be independent from the influence of governments. In that sense, Mr Lane, a respected economist who already sits on the ECB Governing Council as a national governor, might be preferred.

While the ECB’s top jobs are formally awarded on the basis of individual expertise, they are in the gift of governments, meaning national interest and horse-trading can sway decisions.

The Spanish government notified Portugal’s Mario Centeno, the head of the Eurogroup, of Mr de Guindos’s nomination in a letter, the Economy Ministry said in an emailed statement.

The 58-year-old has been part of the Spanish government since 2011, when he was appointed minister. His career traverses both the public and private sector, and he led the Iberian unit of Lehman Brothers before it collapsed. On Tuesday, Mr de Guindos insisted Spain has a “very high” chance of securing the vice president’s job, arguing it should have never left the ECB’s executive board in the first place. It’s a loss Spain has repeatedly described as unfair.

– Additional reporting, Bloomberg