FILE PHOTO: Spain's Economy Minister Luis de Guindos speaks during a news conference after the weekly cabinet meeting at Moncloa Palace in Madrid, Spain March 31, 2017. REUTERS/Sergio Perez/File Photo
Luis de Guindos © Reuters

Luis de Guindos will become vice-president of the European Central Bank, handing Madrid one of the eurozone’s most senior policymaking jobs and kicking off a shake-up of senior personnel in Frankfurt over the next 18 months.

Mr de Guindos, Spain’s economy minister and a former Lehman Brothers banker, was the only candidate in the race after Ireland said on Monday it would withdraw Philip Lane, its central bank governor, from the contest. 

The decision, taken during a meeting of finance ministers in Brussels, means the Spanish minister, who has no previous monetary policy experience, will replace Vitor Constâncio when the Portuguese’s eight-year term ends in May. 

The appointment of Mr de Guindos is the first out of four vacancies on the central bank’s six-member executive board over the next year-and-a-half, including the role of president and chief economist. 

Top ECB jobs are usually given out according to national lobbying and geographic considerations among the euro-area’s 19 member states. Spain securing the vice-presidency slot increases the likelihood of a northern European member state landing the presidency, which is currently held by Mario Draghi and is due to be filled by October next year. Jens Weidmann, Germany’s central bank governor, is among the rumoured candidates eyeing the top job. 

Mr de Guindos said on Monday that his appointment was a sign of how Spain had “recovered much prestige” in monetary policymaking circles since the depths of the financial crisis in 2012, when the country lost its seat on the ECB executive board.

“Spain can contribute a lot” to Europe, he said, adding that the vice-presidency was “an important post”.

Asked about whether he was qualified for the job, Mr de Guindos said that “to have a diversity of profiles on the board of the ECB is going to be extremely relevant.”

He insisted his appointment was not linked to any deal about who may secure the presidency of the ECB, saying that “there is not conditionality attached at all.”

Ireland’s decision not to push the matter to a vote effectively keeps Dublin’s powder dry with Mr Lane likely to be eyeing the role of chief economist, currently held by Belgium’s Peter Praet. 

Paschal Donohoe, Ireland’s finance minister, said Mr Lane had received support from other EU capitals, but Dublin had chosen not to pursue the candidacy any further because it was “very important . . . that the decision be made on the basis of consensus”. 

Had there been multiple candidates, the finance ministers would have needed to chose one to formally recommend to EU leaders to be rubber-stamped in March. 

The selection of a new vice-president “should not be a source for any disagreement”, Mr Donohoe said. 

Mr de Guindos has long been the frontrunner for the post despite never working in a central bank. Mariano Rajoy, Spain’s prime minister, has lobbied for months for him to be nominated for the role. Spain has been without a seat on the ECB’s six-person executive board since 2012 despite being the eurozone’s fourth-largest economy. 

Members of the European Parliament last week expressed reservations about Mr de Guindos, who has been Spain’s economy minister since 2011. Roberto Gualtieri, the head of the parliament’s influential economic and monetary affairs committee, said that Mr Lane had been the “more convincing” of the two candidates during an informal hearing with MEPs last week. 

Officials at the Frankfurt-based ECB are also known to be less than enthusiastic about the appointment, with Mr Lane being highly rated by his fellow central bank governors. 

But the parliament has no binding role in appointments at the ECB, which has fed criticisms that the central bank is undemocratic.

“While transparent in the sense that it was predictable, the ECB is supposedly accountable mainly to the European Parliament and EU member states. It is intriguing therefore that it is up to the eurogroup to ‘elect’ somebody who was not in fact endorsed by the economic and monetary affairs committee in the parliament,” said Leo Hoffmann-Axthelm, a research and advocacy co-ordinator at Transparency International.

Get alerts on European Central Bank when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article