Explainer: ECB reshuffle kicks into high gear

January 30, 2019

FRANKFURT (Reuters) – The euro zone’s leaders have started to battle over appointments that will reshape the European Central Bank, the 19-country currency bloc’s most powerful institution, in the next few months.


The terms of the ECB’s chief economist Peter Praet (May 31), ECB President Mario Draghi (Oct. 31) and board member Benoit Coeure (Dec. 31) all expire this year.


For chief economist, Central Bank of Ireland Governor Philip Lane is seen as a done deal, as no other candidate has been proposed.

The other positions are up in the air.

For president, Banque de France Governor Francois Villeroy de Galhau is seen as the favorite. Other candidates could include Jens Weidmann (Germany), Olli Rehn and Erkki Liikanen (both Finland), Klaas Knot (Netherlands) and Ardo Hansson (Estonia). Coeure (France) is also mentioned in the press but, as a sitting board member, he is not eligible for reappointment. Some have suggested that if he resigned before a nomination, he could gain eligibility, but such a move would be unprecedented and contrary to the spirit of the law.


Appointments to the six-member ECB board are political, though key roles are usually filled by leading economists.

The next ECB president and the new heads of the European Commission and the European Council are all likely to be negotiated as part of a package after the European elections in late May.

Draghi was appointed four months before he formally took over in 2011. The timeline will be tighter this year but the process should end by the time Europe shuts for summer holidays.


* ECB presidents are normally picked from among the 19 national bank governors who sit on the Governing Council along with the six board members, and should be top-flight economists.

* As the three biggest countries, Germany, France and Italy generally claim board seats, the 16 other members generally share the remaining three spots. Italy could be off the board for more than a year, however, as Draghi is unlikely to be replaced by an Italian. Since the next seat to fall vacant is held by France, it’s possible that Italy will have to wait until Yves Mersch’s term expires on Dec. 14, 2020 to reclaim a board position.

* A nation should not have more than one board seat. So if, for example, Weidmann is appointed ECB president, the other German on the board, Sabine Lautenschlaeger, will be expected to resign.

* The Netherlands, France and Italy have all had ECB presidents in the past and some argue that they should not get the job again until others have had the chance.

* The European Parliament has often complained about the dearth of women in top ECB jobs. Currently, only two of the 25 members of the Governing Council are women.


The Germans certainly think so. But Bundesbank President Weidmann has antagonized many. He openly opposed the ECB’s stimulus program, credited with reviving growth, and got into a public fight with Italy’s prime minister over fiscal discipline. Hints from Berlin also suggest that Germany will seek the EU Commission presidency rather than fight an uphill battle for Weidmann.

(Reporting by Balazs Koranyi; Editing by Catherine Evans)