Sunday 17 February 2019

Spoiled for choice: France has trio of potential candidates for Draghi’s ECB job waiting in wings

John Ainger and William Horobin/Bloomberg

If French President Emmanuel Macron decides to put forward a candidate to succeed Mario Draghi as head of the European Central Bank (ECB), he’ll have plenty of names to choose from.

Of 10 potential successors identified by economists in a Bloomberg survey, three are French – more than any other nation. Bank of France Governor Francois Villeroy de Galhau, ECB executive board member Benoit Coeure, and IMF managing director Christine Lagarde are all considered to be contenders when Mr Draghi leaves in October 2019.

The heavyweight French presence reflects the country’s deep pool of experienced administrators, partly due to its elite grandes ecoles, which could help Macron convince other European Union member states that France deserves the presidency for a second time. Jean-Claude Trichet led the institution from 2003-2011.

“They are good names,” said Mr Trichet. But it’s “the decision of the heads of state, whether they propose candidates and whether they obtain the consensus of the others. I’ve gone through that experience myself.”

In contrast, Germany has never had the post. But Bundesbank president Jens Weidmann’s chances may have faded on signs Chancellor Angela Merkel wants to secure the EU Commission presidency instead. Finland’s Erkki Liikanen is the new frontrunner – a compromise option from a small country – but it’s a tight race.

“It’s clearly possible for France to succeed again,” said Carsten Brzeski, chief economist at ING-Diba and a former European Commission economist. “I would struggle to come up with three German names. That’s what the French always play extremely elegantly.”

Mr Villeroy De Galhau, just behind Mr Liikanen and ahead of Ireland’s Philip Lane in the survey, is a product of France’s top-tier Ecole Polytechnique and Ecole Nationale d’Administration. That set the 59-year-old on a public-sector career path through senior civil service posts before he left for the private sector in 2003 and rose to a senior role at BNP Paribas. If the ECB could select its next leader, Mr Coeure would be the choice, according to several euro-area central bank officials. France could also nominate a strong candidate in Ms Lagarde – the country’s first female finance minister back in 2007 and the first woman to lead the IMF in 2011.

What ultimately matters for the ECB presidency is EU governments, and the extent to which member states are willing share out the political prizes.

“It’s impossible that it’s an Italian again, it’s impossible that it’s a Spaniard because they already have Vice President Guindos. If it’s a Dutch or a Finn, that’s a German spin,” said Laurent Clavel, senior international economist at Axa.

“It’s difficult to envisage having a German president of the Commission and a Finnish president of the ECB. France has a chance.”

Online Editors

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