Ireland's Lane in Suspense as Backing Sought for Key ECB Job
(Bloomberg) -- Philip Lane has staked his claim to become the European Central Bank’s next chief economist -- now he must wait to see if he has the field to himself.
At a meeting of euro-zone finance ministers on Monday, the Irish central-bank governor became the first nominee to replace Peter Praet on the ECB’s Executive Board in June. That puts him in prime position to take on Praet’s powerful role of overseeing economic projections and writing monetary-policy recommendations.
Yet while no other candidates were named, the race is far from over. Governments have until the end of the month to put forward their proposals, with a final choice targeted for mid-February. Heavyweight economies such as Germany -- which held the chief economist role from the euro’s foundation until Belgium’s Praet won the position eight years ago -- have yet to give their view.
Finance ministers will choose the next board member, and governments will have to sign off. It’s within ECB President Mario Draghi’s gift to allocate a portfolio. Draghi and Praet are the only two of the six top officials with an economics PhD, making such a qualification an important distinction in winning the post.
Lane has a doctorate from Harvard, and has previously expressed an interest in joining the board. He raised his profile in 2018 when the Irish finance ministry put him forward for the ECB vice presidency, before withdrawing him in favor of Spain’s Luis de Guindos.
Ireland is also the only founding euro member never to have had a board seat, and its ambitions could carry outsized weight just now as the European Union seeks to alleviate concerns that the country will suffer from a disorderly Brexit in the neighboring U.K. It missed out on another top position last year when Deputy Governor Sharon Donnery unexpectedly lost her bid to lead the ECB’s bank-supervision arm.
But other nations also have qualified candidates. Finland’s Olli Rehn served as Commissioner for Economic and Monetary Affairs in Brussels before his central-bank career, while Estonia’s Ardo Hansson holds a PhD in economics from Harvard.
The key may be Germany’s decision on who to back, or even whether to put forward its own candidate. As Europe’s largest economy, it could make a strong claim to having an influential role. Until late last year, it had been expected to push for the ECB presidency when Draghi leaves in October. That now looks less likely amid signs the government wants to win a top political position such as the European Commission presidency instead.
German Finance Minister Olaf Scholz dodged the question when asked in Brussels for his view on who should succeed Praet. The Irish finance ministry declined to comment on whether it expects a challenger to Lane to be presented.
If Germany chooses to pitch for the position of chief economist instead of trying for the presidency, that could give back the country some of the sway over monetary policy that it has lost in recent years.
Its current board member, Sabine Lautenschlaeger, is a lawyer by training and has focused on bank oversight. Bundesbank President Jens Weidmann, who sits on the ECB’s Governing Council, was largely marginalized as the ECB approved massive stimulus that he disagreed with.
Should Germany win, Lautenschlaeger would likely have to end her term almost three years early though. Euro-zone countries by tradition don’t hold more than one ECB board seat simultaneously and it’s unlikely that Germany would be given leeway.
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