McCreevy to back Greek candidate

 

The Minister for Finance, Mr McCreevy will support Bank of Greece governor Mr Lucas Papademos as the next vice-president of the European Central Bank (ECB).

Mr Papademos is the front-runner to replace Frenchman Mr Christian Noyer, who steps down at the end of May. The other declared candidate is Belgian academic and politician Prof Paul de Grauwe.

"Ireland is supporting Mr Papademos," a Department spokesman said. European finance ministers will discuss the appointment when they meet in Oviedo, in northern Spain, later this week.

A German think-tank has proposed relegating smaller euro-zone states to sharing seats on the ECB governing council as more countries join the EU.

The DIW institute said yesterday that larger member-states - Germany, France, Italy, Spain and the Netherlands, plus Britain and Poland if they join - should have permanent seats on the ECB's policy council.

The think-tank said the current system, where central bank governors of all 12 euro-zone countries had a seat on the voting council alongside six executive board members, would become unworkable after enlargement by 10 or more new states. Keeping the status quo where each member has one vote could also tilt the balance of power too far in favour of smaller countries with little economic clout, DIW said.

The DIW proposal suggests that small euro-zone states should form groups of three, with each group assigned one vote.

ECB president Mr Wim Duisenberg said last month the bank had been studying reform options and should complete this review in the course of this year. In November, Mr Duisenberg said the bank was likely to opt for a form of rotating membership system similar to one in the United States. - (Reuters)