Weidmann to head ECB in 2019, say majority
by OMFIF Analysis
September’s advisers network poll focuses on the future leadership of the European Central Bank. Members of the network were asked: ‘After Mario Draghi steps down as president of the ECB in November 2019, who will replace him?’ The choices were Jens Weidmann, president of the Deutsche Bundesbank, François Villeroy de Galhau, governor of the Banque de France, or someone else.
Of those polled, 61% forecast that Weidmann will take over from Draghi, while 30% believe that Villeroy de Galhau will be selected. Just 9% expect the role to go to another candidate.
Any candidate requires the endorsement of all European Union finance ministers. He or she then has a hearing at the European Parliament, which casts a non-binding vote. The post is finally confirmed by euro-area leaders, which is then held for a total of eight years. The parliament has no power to block ECB appointments.
‘Weidman is the individual most likely to provide credibility to the ECB, which will probably be sorely needed against a backdrop of QE ending, Brexit, and (hopefully) a very long-lived economic cycle. However, political turmoil could easily lead to a compromise choice of ECB president.’
‘A German ECB president would concentrate far too much power in German hands. But the outcome will depend on who fills the top slots as presidents of the Commission, Council and Eurogroup after May 2019.’
‘I would bet on Monsieur Villeroy de Galhau. The Germans will take a spot at Brussels-EU institutions in exchange.’
‘Why not Klaas Knot, the president of the Dutch Central Bank? He is as tough as Weidmann, but not a German and that might make him more acceptable for other countries.’
‘After two presidents from large Latin countries it is hard to predict whether it is the turn of a small country or of a German who will reinstate a degree of orthodoxy after years of unorthodox measures. In the latter case, Weidman will be the natural choice.’
‘I suspect Jens Weidmann will get it, although I think it would be nice if someone other than a Frenchman or German were chosen. But among the euro area governors, I don’t see anyone that stands out.’
‘Never underestimate French ingenuity in the business of horse trading.’
‘As Germany adjusts to the challenge of working closely with a reforming France under President Macron, it will need the reassurance of having, at the helm of the ECB, somebody who instinctively understands the importance of the ECB’s mission to defend the long-term value of the euro.’
‘I think it would be a wise move by the ECB to elect someone from an economy that made an impressive transformation following the 2008 financial crisis. Namely a Spanish top banker and a woman, Ana Patricia Botín.’
These statements were received as part of the September poll, conducted between 12 July-7 August, with responses from 24 advisory network members.
Who will be at the helm of the Federal Reserve after February 2018?
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