France has yet to sign off on a future German ECB head

French finance minister gives clearest indication yet that Paris could challenge Bundesbank president Jens Weidmann’s attempts to succeed Mario Draghi

 

France’s finance minister has signalled Paris has yet to sign off on a German head of the European Central Bank, saying the nomination of a Spaniard for the role of ECB deputy president “in no way prejudges” who will succeed Mario Draghi in 2019.

France decided to back ... [Spain’s finance minister Luis] de Guindos as ECB vice president but this choice in no way prejudges other choices France will make for other major European posts,” Bruno Le Maire said on the sidelines of an agriculture convention in Paris.

“Some people a bit hastily draw the far-fetched conclusion that because a southerner, a Spaniard, was put at the ECB there could be a northerner in exchange for this or that job... That’s not how we see things,” added Mr Le Maire.

The remarks are the clearest indication yet that Paris could challenge Bundesbank president Jens Weidmann’s attempts to succeed Mr Draghi, who steps down at the end of October next year. Mr de Guindos’ nomination has been widely interpreted in the German media as increasing Mr Weidmann’s chances to secure the top job.

Concerns over Weidmann

There are concerns that Mr Weidmann, one of the more hawkish members of the current ECB governing council, would struggle to secure a consensus for monetary policy decisions.

Mr Weidmann has objected to several monetary policy measures put forth by Mr Draghi and his inner circle to boost the currency area’s economy, including the €2.5tn quantitative easing package and the ECB president’s promise to do “whatever it takes” to keep the zone intact.

A decision on the next ECB president is unlikely to come before European elections in May next year. The job is seen as part of a broader deal between European member states on several key appointments -- including who will replace Jean-Claude Juncker as Commission president.

France’s central bank governor François Villeroy de Galhau is tipped as Mr Weidmann’s main rival for the role, others think the job could go to a figure from a smaller northern European country.

Mr de Guindos is set to move from Madrid to the ECB in June to take on the role of ECB vice president.

- Copyright The Financial Times Limited 2018