Berlin nominates woman economist for ECB board

FRANKFURT: The German government yesterday named respected economist Isabel Schnabel as its candidate for the European Central Bank board, replacing a previous German member who resigned.

A cabinet meeting led by Chancellor Angela Merkel signed off on the proposition from finance minister Olaf Scholz. Like other major eurozone economies France and Italy, Germany traditionally holds one of the seats on the sixperson ECB board. But Sabine Lautenschlaeger quit last month in protest at the ECB’s September decision to boost stimulus to the single currency bloc, the last major policy move expected under departing president Mario Draghi.

It will now be up to heads of government to confirm Schnabel’s appointment at a December summit. Schnabel, 48, is a professor specializing in banking regulation and financial crises at the University of Bonn, having earlier studied at Paris’ Sorbonne university. Since 2014 Schnabel he has been the only female member of the Council of Economic Experts that advises the German government.

If confirmed, she would be one of just two women on the sixstrong ECB executive board alongside incoming president Christine Lagarde. The pair would also be the only female members of the Frankfurt institution’s 25-strong governing council, which includes national central bank chiefs.

Many politicians and economists in Germany and further afield welcomed Schnabel’s nomination, although the small probusiness Free Democratic Party (FDP) complained.

Schnabel is “best known for her work on the banking system, financial stability and regulation, but she could take on broader responsibilities at the ECB,” Pictet Wealth Management strategist Frederik Ducrozet commented. Incoming ECB head and former IMF boss Lagarde could rejig board members’ roles when she takes office on November 1.

Some saw in Schnabel’s nomination an olive branch from Berlin to the ECB. She told business daily Handelsblatt last month that “in Germany the ECB, one of the most important European institutions, is constantly scapegoated” for problems. “Things like that turn on you eventually,” she added, pointing to Britain’s 2016 vote to quit the European Union after decades of Brussels-bashing by politicians and the press. In a tweet on Tuesday, economist Christian Odendahl of the Centre for European Reform think tank praised Schnabel’s “lack of fear to take on German myths about economic policy and the ECB.”