Finn most likely to take over from Draghi, say economists
Erkki Liikanen, the former Bank of Finland governor, is the most likely – but not necessarily the best – candidate to succeed Mario Draghi as president of the European Central Bank, according to a poll of economists.
Benoît Coeuré, one of the executive board members at the ECB, emerged in the Financial Times’s informal poll as the preferred candidate to take over.
Mr Draghi is set to depart at the end of October after a tumultuous eight years in charge, during which time he is widely credited with staving off a collapse of the single currency area.
The ECB’s leadership is one of the top jobs in European policymaking to be decided during 2019. Mr Draghi’s successor will have to decide how quickly to steer the euro zone out of an era of ultra-loose monetary policy that has dominated the Italian’s term.
Of the 24 economists polled by the Financial Times , Mr Coeuré was a favoured candidate named by seven respondents. However, just one respondent thought Mr Coeuré most likely to be picked.
That compared with eight votes for Mr Liikanen, whom three respondents said they would like him to get the job.
“My choice and my bet is Erkki Liikanen,” said Andre Sapir, a senior fellow at Bruegel and a professor at the Free University of Brussels. “He combines his central bank experience with impressive political experience at home as minister of finance and in the European Commission, where he had two mandates as commissioner.”
Before Mr Liikanen left the Bank of Finland in the summer, he was the longest-serving member on the ECB’s rate-setting governing council. He also played an important role in reshaping how banks are regulated after the global financial crisis, heading a commission that advised Brussels on how to restructure the sector.
François Villeroy de Galhau, Banque de France governor, is also among the favourites to win the race, with six respondents saying he would be named as Mr Draghi’s successor.
Danae Kyriakopoulou, chief economist and head of research at the think tank Official Monetary and Financial Institutions Forum, said Mr Coeuré, another Frenchman, would “make an excellent choice” but would struggle to secure the nomination because of legal rules that limit executive board members to one term of eight years.
Mr Coeuré’s term is set to expire around the turn of 2020. It is not clear whether an ECB president could win another eight-year mandate however, and some consider an exception to the rule possible.
Ken Wattret, chief European economist at IHS Markit, a research firm, described Mr Coeuré as “an experienced, super-smart continuity candidate, limiting handover risk”.
Jens Weidmann, the Bundesbank president and an early frontrunner in the ECB leadership race, was only seen by three respondents as likely to succeed Mr Draghi. The shift comes after reports this year that German chancellor Angela Merkel would prefer the European Commission presidency for the euro zone’s largest economy and not the ECB job.
Mr Weidmann is unpopular in several other European capitals, notably Paris, for his refusal to back a series of measures aimed at staving off a serious bout of stagnation in the euro zone. “Unfortunately, the politicians do not want Weidmann as the next ECB president. Whoever follows Draghi will more or less continue his policies,” said Joerg Kramer, chief economist at Commerzbank.
Germany has never had a head of the ECB. Jean-Claude Trichet, a Frenchman, served an eight-year term before Mr Draghi took charge.
Olli Rehn, Mr Liikanen’s replacement as Bank of Finland head and a former vice-president of the European Commission, was named by five people as a leading candidate.
Respondents did not expect a replacement for Mr Draghi to be announced until after the European elections in May. – Copyright The Financial Times Limited 2018
Erkki Liikanen: former Bank of Finland governor