BRUSSELS — Judge a governor on his merits, rather than his passport.
That’s what Latvia’s central banking chief is hoping eurozone finance ministers will take onboard, as he tries to elbow his way ahead in a crowded race for the European Central Bank’s vice presidency.
“I’m the best one,” Mārtiņš Kazāks told POLITICO in an interview ahead of a secret ballot among the euroclub’s 21 ministers. Estonia, Croatia, Finland, Lithuania and Portugal are also vying for the position, which will become vacant after Luis de Guindos’ term concludes on May 31.
The vice presidency is the first of four vacancies — including the presidency — that will need filing on the ECB’s six-strong Executive Board over the next two years, triggering a fierce game of musical chairs and political jockeying for the most influential financial posts within the eurozone.
The bloc’s five largest economies — Germany, France, Italy, Spain and the Netherlands — have largely crowded out the competition for the Executive Board over the ECB’s 28-year existence. Each board post comes with an eight-year term, making it even harder for smaller countries to get a seat at the table. Latvia might be small, but Kazāks has big ambitions for the job.
“We need, in this volatile, multipolar world, to stand strong. I would like to see Europe as one of the superpowers geopolitically,” the 52-year-old said, urging the EU to create an economy that can withstand external pressure from China’s cheap exports, Russian aggression, and U.S. tariffs. “If things don’t change … I worry about Europe’s splintering.”
EU unity took a serious hit in December, when Czechia, Hungary and Slovakia demanded they be kept out of a €90 billion funding drive to help Ukraine defend its borders against Russian troops. Those cracks in the EU could widen if far-right and Euroskeptic parties in France and Germany continue to gain ground.
Helping secure the EU’s place as a superpower on the world’s stage is a lofty ambition for a vice president, whose public appearances involve sitting silently alongside the president after ECB monetary policy meetings.
But Kazāks has no intention of being a spare tire for the Frankfurt-based central bank. The Latvian sees the vice presidency as the perfect platform to lobby governments to create a single market that’s fit for purpose, by implementing painful reforms outlined in a 2024 report by the ECB’s former president, Mario Draghi.
European Commission President Ursula von der Leyen has made Draghi’s report a central pillar of economic policy for her second term in Brussels, but progress has been painfully slow. A study in September found that of Draghi’s 383 recommendations, barely 11 percent had been completed. Getting the rest over the line will require a change in the mindset of politicians that extends beyond election terms, according to Kazāks. Replacing national currencies with the euro was a prime example of this type of generational thinking.
“If you don’t have a strong economy, you will never have a strong geopolitical standing,” he said, calling for more pressure to implement Draghi’s report and create a financial market that can rival Wall Street. “That means the ECB and its Executive Board — and vice president, of course — being vocal about these things. That is part of the job.”
Baltic burn
Kazāks needs to make a good impression to distinguish himself from his rivals, especially in the Baltics. Diplomats detest having to pick favorites from a region and will usually opt for less contentious bids, as was the case when all three Baltic nations submitted bids to host the bloc’s dirty money watchdog. The agency ended up in Frankfurt.
A similar political scenario could unfold in the coming weeks — to Finland’s advantage, according to diplomats who spoke on the condition of anonymity. Bank of Finland Governor (and Brussels veteran) Olli Rehn would tick a lot of geopolitical boxes if selected for the vice presidency. Finland also borders Russia on the EU’s northeastern periphery, giving finance ministers an easy way out from playing favorites in the Baltics.
Kazāks is urging ministers to focus on applicants’ CVs, rather than grouping them into geographic regions.
“Of course, in terms of the political process, most likely it creates some added complexity,” he said. “But who expects that, for instance, Benelux countries would always come up with just one candidate? We are still separate and individual countries.”
Battle scars
Latvia carries its own battle scars from multiple crises that Kazāks has had to address. The country’s financial reputation took a nosedive in 2018, when allegations of bribery against former central bank governor Ilmārs Rimšēvičs emerged. Soon after, the country’s third-largest lender, ABLV Bank, collapsed after the U.S. took criminal action against it for laundering dirty money, connected to the North Korean weapons program, from former Soviet countries. The scandals prompted tough anti-money laundering reforms, many of which Kazāks oversaw.
“It was painful to certain parts of the economy,” he said, heralding Latvia’s maturity after recovering from the scandals in 2018. “We were, by and large, relatively junior. It’s time for us to take on more responsibility [in the eurozone].”
Economic credentials alone are rarely enough to secure a seat on the ECB’s Executive Board, making Latvia’s bid for the vice presidency an uphill battle. While Kazāks is determined to secure the ECB’s No. 2 spot, he hinted at running again for one of the other posts if unsuccessful this time.
“My skill set and my experience is still there, and if I can do some good on a European level, of course, I would be happy to deliver if I am given a chance,” he said. “Let the best win.”
