Will Philip Lane’s ECB nomination rain on Spain’s parade?

Cantillon: Spanish finance minister was favourite to win VP post at European Central Bank

Luis de Guindos: Spain will not confirm the minister as its candidate for the ECB job unless it is sure of a win.   Photograph: Dario Pignatelli/Bloomberg

Luis de Guindos: Spain will not confirm the minister as its candidate for the ECB job unless it is sure of a win. Photograph: Dario Pignatelli/Bloomberg

 

There has been much talk in Government and banking circles about the decision by Minister for Finance Paschal Donohoe to nominate Philip Lane, the governor of the Central Bank of Ireland, for the post of European Central Bank vice-president, due to fall vacant in May. Spanish minister for the economy Luis de Guindos had long been seen as the strong favourite, as Spain plotted a return to the ECB executive board after a six-year absence, though he has yet to be formally nominated.

Spain is claiming support from Germany, France and Italy and said that while Ireland will compete, it does not have the political weight to win. However, the outcome is still hard to call, with the big countries eyeing up the prize of ECB president, as Mario Draghi’s term comes to an end in October of next year. There are also four other ECB positions to fight for, opening up the usual “will you vote for our candidate if we vote for yours” discussions.

Interestingly, Spain has still to officially confirm that de Guindos will be its candidate and will not do so unless it is pretty sure of a win. On Friday some members of the European Parliament – who sit on the Economic and Monetary Affairs Committee – expressed reservations to news agency Bloomberg about Guindos, largely on the basis that he was a politician and moving straight into the ECB might undermine its independence. Guindos is a conservative – a member of the European People’s Party, which also, ironically, includes Fine Gael – and the initial doubts are coming from parties such as the greens, the socialists and some on the far right.

The committee holds hearings before senior ECB appointments are made. The hearings are non-binding – the committee cannot block an appointment, but it can certainly delay it. The appointment of Luxembourg’s Yves Mersch was stalled for months in 2012 over a lack of female contenders for top ECB jobs. Gender will certainly be an issue this time around. Will Spain decide at the eleventh hour to nominate a woman if it feels Guindos will not win? There is gossip in Spain, too, that prime minister Mariano Rajoy would quite like to keep Guindos in his cabinet, but the potential candidate is very keen to run.

With nominations closing next week, this could yet get tasty.

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