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Austria Nominates Holzmann as New Head of National Central Bank

Austria Nominates Holzmann as New Head of National Central Bank

(Bloomberg) -- Austria is set to appoint Robert Holzmann, an economist put forward by the nationalist Freedom Party, to lead the country’s central bank and help set euro-area monetary policy from September.

Holzmann, who will turn 70 in February, will succeed Social Democrat Ewald Nowotny, according to a government spokesperson. The government will nominate Holzmann at a cabinet meeting on Wednesday, and President Alexander Van der Bellen will have to sign of on the appointment.

Holzmann will be one of many new faces on the European Central Bank’s Governing Council this year. Slovenia’s Bostjan Vasle and Belgium’s Pierre Wunsch joined the group in January, and Slovakian Finance Minister Peter Kazimir will start as governor just a few months later. With Philip Lane likely to move to Frankfurt as new ECB chief economist in June, he’ll make way for a new Irish official. Ardo Hansson’s tenure in Estonia expires the same month, before President Mario Draghi and Executive Board member Benoit Coeure finish their terms toward the end of the year.

Holzmann’s links to the Freedom Party date back to the 1970s, when he was a young research fellow at Vienna University and became friends with the party’s late leader Joerg Haider. Holzmann worked as assistant to Van der Bellen, a former center-left economics professor.

He taught economics at the universities of Graz and Vienna, and worked at the OECD, the IMF and the World Bank -- mostly on labor markets, pensions and social-security systems. His academic writing focused on those issues, not on monetary policy.

Austria Nominates Holzmann as New Head of National Central Bank

Holzmann hasn’t commented on economics since his name was first floated in August but -- according to Freedom Party leader Heinz-Christian Strache -- he was involved in discussions about removing banking supervision from the central bank’s powers.

The appointment comes amid heightened concerns over central-bank independence in western economies as anti-establishment parties gain in influence.

Members of Italy’s populist coalition administration have urged the European Central Bank to protect the nation from speculators, the Bank of England has been attacked by politicians over its Brexit warnings, and U.S. President Donald Trump has criticized Federal Reserve interest-rate hikes.

Kurz’s government replaced not just Nowotny, who is set to retire after two terms, but the Austrian central bank’s entire directorate. Gottfried Haber will be the new vice governor, following Andreas Ittner. The two remaining board seats will be filled by Thomas Steiner and Eduard Schock.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Vidya Root at vroot@bloomberg.net, Jana Randow, Zoe Schneeweiss

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