Monday 15 July 2019

Ireland nominates top banker for key ECB job

Belgian Peter Praet’s eight-year term expires on May 31.

Governor of the Central Bank of Ireland Philip Lane (Niall Carson/PA)
Governor of the Central Bank of Ireland Philip Lane (Niall Carson/PA)

By Associated Press Reporter

Ireland has nominated the head of its national central bank for a top spot at the European Central Bank (ECB) in a year that will see key leadership posts change hands at the monetary authority for the 19-country eurozone and its 340 million people.

Finance minister Paschal Donohoe put Philip Lane forward for the spot on the ECB’s six-member executive board that is currently held by Belgium’s Peter Praet, whose eight-year term expires on May 31.

Mr Lane has been mentioned prominently in media speculation about who will take over Mr Praet’s responsibilities as the powerful economics chief, responsible for proposing monetary policy moves to the 25-member rate-setting council.

It is not automatic, however, that Mr Praet’s replacement would be assigned the same duties by bank president Mario Draghi.

Eurozone leaders will decide on the post in coming weeks.

Mr Draghi himself is coming to the end of his term on October 31.

Speculation about candidates to replace him has focused on former Finnish central bank head Erkki Liikanen, Bank of France head Francois Villeroy de Galhau and Jens Weidmann, head of Germany’s Bundesbank central bank.

Mr Lane is a former economics professor who has been on the ECB rate-setting council due to his job as governor of the Bank of Ireland.

He was a candidate last year for the ECB vice president job that ultimately went to former Spanish economy minister Luis de Guindos.

Mr Lane has been described by analysts at ABN-AMRO bank as a centrist whose views fall between so-called hawks who oppose extensive central bank stimulus and doves who tend to favour more.

He has supported the bank’s recently ended stimulus programme of 2.6 trillion euros in bond purchases with newly printed money, and opposed setting a firm exit date, saying instead that economic data would be decisive.

Mr Lane has stressed that current low rates and the bond purchases were “very expansionary” and constituted “a temporary phenomenon”, not a permanent state, while cautioning markets that “it would be a very risky strategy to bet that interest rates will remain so low forever”.

National horse-trading plays a large role in such appointments.

Ireland can argue that it has never had one of the top six ECB posts during the ECB’s 20-year existence.

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