Central Bank governor Philip Lane and his rival for the vice-presidency of the European Central Bank last night faced a grilling by MEPs at the parliament's economic affairs committee.
Mr Lane made a presentation, robustly defending the ECB’s current macroeconomic and supervisory strategies, to the in camera hearing in Brussels and faced questions from MEPs during an hour-long hearing.
He was followed by Spain’s minister for the economy Luis de Guindos, widely tipped as the favourite for the post.
Outlining his considerable experience across a full range of central banking functions, Mr Lane made clear he would be a hands-on VP and one committed to a continuity of current policies.
“My decades of experience in quantitative macroeconomics has enabled me to be an influential contributor in this process,” he said of his engagement in the ECB’s management of price stability and its adoption of “unconventional measures” – quantitative easing – in recent years.
“In my assessment,” he told MEPs, “the current strategy – that combines a) the negative deposit rate at minus 40 basis points, b) the asset purchase programme (APP), c) forward guidance on interest rates, and d) operations such as the targeted long-term refinancing operations (TLTROs) – is proving successful in providing the monetary accommodation that is required in order to foster recovery, maintain inflation expectations, eliminate deflation risk and, over time, ensure that inflation is on a sustainable path back to the target.”
Mr Lane also insisted that it is “clear that the resilience of the euro area requires a commitment to fiscal sustainability by each member country.”
MEPs and the ECB itself are entitled to be consulted on the replacement of Portugal’s Vítor Constâncio, the outgoing ECB vice-president, at the end of May. Euro zone finance ministers – Mr Guindos’s colleagues – will discuss the nominees next Monday, and the full Ecofin on Tuesday will make a recommendation to the EU summit on March 22nd for a final decision.
If Mr Guindos wins it will be the first time that finance ministers have recommended one of their own for the ECB’s executive board. If Mr Lane, a professional economist, wins, it will be the first time Ireland will be represented on the board.
Governor of the Central Bank since November 2015, Mr Lane has since served as a member of the governing council and general council of the ECB. He is also being talked of as being in line for the bank’s chief economist job.