Eurogroup Might Discuss ECB Board Seat At May 2 Meeting

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–But No Decision On Replacement For Gonzalez-Paramo Likely Until May 14

BRUSSELS (MNI) – Eurozone finance ministers, in a meeting called
for May 2, might discuss an impending vacancy on the European Central
Bank’s Executive Board but are not likely to settle on a candidate for
the job until their next monthly meeting on May 14, EU officials told
MNI on Monday.

The May 2 meeting, which is not one of the finance ministers’
regularly scheduled monthly gatherings, was called to discuss bank
capital rules.

EU diplomats involved in the negotiations are skeptical that the
Eurozone finance ministers, known as the Eurogroup, can reach an
agreement that soon on who should replace the outgoing Jose Manuel
Gonzalez-Paramo. French Finance Minister Francois Baroin said earlier
this month that the appointment would not be made until after France’s
presidential runoff election on May 6.

Evidence that little headway has been made on the issue was
reinforced after Eurozone finance ministers decided Monday not to
proceed with plans to discuss the matter via teleconference this week.

That sets up the Eurogroup’s meeting in Luxembourg on May 14 as the
possible crunch time for a decision on the post at the ECB’s influential
executive board.

The vacancy is the most pressing of several senior EU financial
vacancies being haggled over by the bloc’s 27 member states. Also up for
grabs is the presidency of the Eurogroup; the leadership of the new
Eurozone bailout fund, the European Stability Mechanism (ESM); and the
presidency of the European Bank for Reconstruction and Development
(EBRD).

Gonzalez-Paramo is due to step down when his term expires at the
end of May, but his successor must first be approved by the European
Parliament’s plenary which is scheduled to meet on May 9-10 in Brussels
and on May 21-24 in Strasbourg.

Before the parliament as a whole can approve an appointment,
however, the candidate must first submit to a hearing of the
parliament’s Economic and Monetary Affairs Committee, which will then
make a ‘yes’ or ‘no’ recommendation to the plenary.

The committee has penciled in May 7 and 8 as possible dates for the
hearing. Although it would likely try to accommodate a last minute
procedure to avoid the risk that the position go unfilled for a time,
such a demand would likely irritate parliamentarians already irked by
what they see as a lack of female candidates at a time when EU lawmakers
are considering legislation to mandate quotas for women in top jobs.

Just how important gender considerations might prove to be is
unclear, but they are yet another complicating factor in the already
complicated negotiations.

Only one female candidate has been put forward to fulfill any of
the EU vacancies under consideration: Spanish economist Belen Romana,
who has been proposed as a possible head of the ESM.

Romana faces stiff competition from Germany’s Klaus Regling, who
heads the Eurozone’s existing bailout fund, the European Financial
Stability Facility. Her bid is also complicated, or perhaps aided, by
Spain’s proposal for Antonio Sainz de Vicuna to take over from Paramo
at the ECB.

Spain’s Eurozone partners would not easily agree to allow two of
the senior positions to go to Spaniards suggesting that Spain may have
to give up its hopes for one of the jobs, EU diplomats say.

If Spain were to give up on the ECB seat, it could clear the way
for Luxembourg’s central bank governor Yves Mersch, favoured by a number
of the Eurozone’s more financially secure members. But his chances are
complicated by calls from some quarters for the Luxembourg Prime
Minister Jean-Claude Juncker to stay on as president of the Eurogroup,
perhaps the most high profile vacancy at stake.

The idea of both the ECB seat and the Eurogroup leadership being
occupied by officials from tiny Luxembourg, whose population is
500,000, would not go down well with some governments.

Giving the Eurogroup presidency to Germany’s finance minister
Wolfgang Schaueble would solve that problem, but it could pressure
Germany to sacrifice its candidates for the ESM and EBRD, both of whom
are incumbents and natural favourites.

That no country should get more than its fair share of top jobs is
a main factor in the horse-trading over EU jobs, but this time the
divide between the Eurozone’s economically healthier ‘northern’
countries and the weaker ‘southern’ ones also weighs heavily.

As a result, Germany, the Eurozone’s biggest and strongest member,
may feel emboldened to press for more than one of the roles.

–Brussels newsroom: +324-9522-8374; pkoh@marketnews.com

[TOPICS: M$X$$$,M$$EC$,MGX$$$,M$$CR$]

2012-04-16T16:50:01+0000

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