EU chooses Spaniard for ECB vice-chair

Move paves way for Germany’s Weidmann to replace Draghi

BRUSSELS, Feb 19, (RTRS): Eurozone finance ministers on Monday chose Spanish Economy Minister Luis de Guindos to succeed European Central Bank Vice President Vitor Constancio in May, a move likely to boost the chances of a German becoming head of the ECB next year.

The choice of a Southern European for vice president increases the likelihood that a northerner such as German Bundesbank governor Jens Weidmann could be elected to replace Mario Draghi as head of the ECB in 2019. This could influence the bank’s ultraloose monetary policy.

“The Eurogroup (of euro zone finance ministers) today gave its support to the candidacy of Luis de Guindos for the position of Vice President of the European Central Bank (ECB),” an EU statement said after a brief discussion among finance ministers.

De Guindos said he would resign as Economy Minister within days after being chosen as ECB Vice-President.

Initially faced with two candidates — de Guindos and Irish central bank governor Philip Lane — the ministers had their choice made simple for them by Ireland’s decision to withdraw Lane’s name.

“I believe that it is crucial that the election of a new Vice-President for the ECB is based on consensus, and should not be a source for any disagreement,” Irish Finance Minister Paschal Donohoe said in a statement.

“In that context, I have decided that, on balance, it would be in the interests of the Euro-area as a whole to withdraw Philip’s candidacy in advance of any vote,” he said, adding that de Guindos had an “excellent track record”.

Ministers said the appointment of De Guindos should be finalised by EU leaders in a regular summit on March 22-23. The European Parliament’s economic committee, which has only a consultative role, said after an informal hearing of both candidates last week that Lane was a better choice, but euro zone officials said de Guindos was the favourite.

Spain, the euro zone’s fourth-largest economy, has not had a representative on the executive board of the ECB since Jose Manuel Gonzalez-Paramo’s term ended in 2012.

Ireland has never held a post in the ECB at all, but Lane is widely seen as a top candidate to become ECB chief economist when Peter Praet leaves his position next year, euro zone officials said.

The choice of a Southern European for vice president could pave the way for Weidmann to be elected at the head of the ECB next year.