As the summer cools off in Europe, the race for the top jobs at the European Central Bank is about to start warming up.
No fewer than four of the six seats on the ECB’s executive board, including the presidency and the influential chief economist’s position, are due to come up for grabs between now and the end of 2027, and the fight over who gets what is set to be intense.
The succession battle will start in earnest when Vice President Luis de Guindos leaves in May, and could also provide an early glimpse of who might one day claim the ultimate prize when Christine Lagarde steps aside in 2027.
The ECB board comprises a president, a vice president and four other members. All but the president, whose choice is the exclusive competence of heads of government, are nominated by the Eurogroup before going through consultations with the European Parliament and the ECB’s own Governing Council.
Officials involved in the talks told POLITICO they expect a deal for the vice-presidency to crystallize around the turn of the year, though the calendar is still fluid.
For now, the rumor mill is in full swing. Here are the names most frequently doing the rounds among eurozone officials and ECB watchers — and the political currents likely to shape the outcome.
The Spanish question
Spaniard Pablo Hernández de Cos, the new general manager of the Bank for International Settlements and former Bank of Spain Governor, is one policymaker frequently touted for a senior job. Having also chaired the Basel Committee on Banking Supervision, de Cos is extremely well versed not only in all things monetary policy, but also financial stability, which has always been the purview of the ECB vice president.
In fact, de Cos is so well qualified that he is often mentioned as a possible ECB president. Spain has never had the top job. But sitting out the fight over the VP seat is a gamble for Spain. Germany, France and Italy — the three biggest economies in the eurozone — have always had a seat on the Executive Board, but Spain’s claim to equal privilege hasn’t always been acknowledged. It painfully lost its seat to Luxembourg’s Yves Mersch during Europe’s sovereign debt crisis, its reputation badly dented by the request for a bailout that was brought about by lax supervision of its banking sector.
Should Spain not push aggressively to replace de Guindos with another Spaniard, this would be a clear sign they have their eyes set on Lagarde’s seat.
Smaller countries
While it’s not true currently, the ECB’s top two seats have usually been divided between one larger and one smaller member state. Jean-Claude Trichet was flanked by Greece’s Lucas Papademos, while Portugal’s Vitor Manuel Constancio played second fiddle to Mario Draghi. If this balance is to be restored when de Guindos leaves, then Bank of Finland Governor Olli Rehn, Bank of Greece Governor Yannis Stournaras and former Dutch central bank chief Klaas Knot could all be in the reckoning.
Having served as finance minister and then central bank chief during the sovereign debt crisis, Stournaras would bring a wealth of experience to Frankfurt. Instrumental in bringing the Greek banking system back from the brink, the ECB’s financial-stability-hat will fit him perfectly. However, a powerful argument against him is that Greece already held the position once before.
Knot’s trump card is his role as chair of the global Financial Stability Board (FSB), while Rehn’s experience and strong ties with Brussels, where he served as Commissioner for Economic and Monetary Affairs, could give him an edge.
The German question
Like de Cos, both Knot and Rehn are also said to have an eye on the presidency. The extent to which their countries will push for them will hinge on whether they think Germany will lay claims on the presidency.
After two French and one Italian presidencies, Germany — the country that, more than any other, gives strength to the euro — may want its voice to set the tone at the Bank.
During the sovereign debt crisis, Angela Merkel had sacrificed her then-Bundesbank President Axel Weber, prioritizing control of the bailout process through key appointments at the Eurogroup and the European Stability Mechanism. And it faces a similar tradeoff again if it wants the top job in Frankfurt: for example, it may have to lean on Ursula von der Leyen to step down as European Commission president two years early. A German ECB president would also face a 14-month overlap with fellow German Claudia Buch, who heads the ECB’s banking supervision arm. That’s considerably longer than the 10 months for which the Italians Andrea Enria and Mario Draghi overlapped in 2019.
Go east?
In all of the ECB’s 26 years, only the 12 countries that were first to introduce euro banknotes have had representatives on the board. However, the newer members from central and eastern Europe have started to push more aggressively to get a seat on the board, and the old guard will struggle to defend its privileges indefinitely, especially if a Brussels heavyweight such as Valdis Dombrovskis decides to throw their hat in the race.
The Latvian politician is no stranger in Frankfurt, having attended ECB policy meetings as an observer for a decade. The question is whether such a move would represent a step up for him, given the large clout he carries in Brussels.
Within the ECB, Croatia’s Boris Vujčić would tick all the boxes in terms of academic and professional background. He has been at the head of the Croatian central bank since 2012, leading it through the adoption of the euro. But the vice-presidency might be considered too high a prize for a country which has been in the euro club for less than two years.
Gender balance
The hopes of the CEE countries would doubtless be strengthened if they had strong female candidates, as gender considerations will also come into play. Lagarde has made it a mission to ensure that the Governing Council will never again look as it did during at her first retreat with her colleagues, when the only women present in the room with her adorned the walls in Victorian dresses.
For now, Lagarde and German board member Isabel Schnabel are seen as enough to provide the required balance. But politicians may want to ensure that female representation on the board never slips below two out of six, which could be an argument to appoint a woman as vice president. That would reduce the pressure for heads of government to prioritize gender balance when choosing a replacement for Lagarde in 2027.
Such thinking has led some to suggest European Investment Bank President Nadia Calviño who, in contrast to de Cos, has strong political ties to Sanchez, and who may face less competition for the VP slot than de Cos would for the presidency.
