Macron Backs Villeroy for Second ECB Term at Bank of France Helm

(Bloomberg) --

President Emmanuel Macron nominated Bank of France Governor Francois Villeroy de Galhau for a second term, opting for stability in one of the most important appointment decisions on European Central Bank policy making for years to come. 

The head of state will propose the current chief for ratification by lawmakers, Macron’s office in Paris said in a statement by email. 

The appointment of Villeroy, 62, for another six-year term is subject to hearings at the National Assembly and Senate finance committees. His initial stint will conclude at the end of this month. 

Macron’s choice means that Villeroy is poised to remain only the third Bank of France governor of the current century after Jean-Claude Trichet and Christian Noyer. If he finishes his term, he will have held the ECB seat granted to the euro area’s second-largest economy for a total of 12 years. 

The decision is arguably the most significant in terms of Governing Council jobs due before 2026, when governments must pick a successor to ECB Vice President Luis de Guindos.

The nomination sticks with an official who is the experienced product of France’s bureaucracy and a former chief operating officer of BNP Paribas SA, rather than rocking the boat with a new face from the country’s deep bench of experienced economists. 

OECD Chief Economist Laurence Boone and former ECB Executive Board member Benoit Coeure are just two examples Macron could have selected from that broad cadre. 

During his first term, Villeroy established himself as a safe pair of hands and a distinctive voice at the ECB. He describes himself as a pragmatist, shunning the labels of hawk or dove given to other colleagues on the Governing Council. 

Villeroy has been less critical of French deficits than his predecessors, while also expressing support for Macron’s domestic agenda to overhaul labor laws. 

He has led a major revamp of the Bank of France itself which has reduced headcount from more than 12,000 when he arrived in 2015 to some 9,500 last year.

©2021 Bloomberg L.P.