An Eastern European for the Executive Board of the European Central Bank?

There is currently much discussion and speculation about who will get the EU’s top jobs, such as President of the EU Commission (currently Jean-Claude Juncker), President of the European Council (currently Donald Tusk) and President of the European Parliament (currently Antonio Tajani).

And up for change is also the President of the European Central Bank since Mario Draghi’s term ends on 31 October and cannot be renewed. 8 years and then it is out. Who will succeed him? Bloomberg has a nice infographics on this topic and puts Francois de Villeroy Galhau of France in the lead, closely followed by Erkki Liikanen of Finland.

So, if one can speculate about the new Commission President or the new ECB chief, why not go a step further?

Two other positions at the ECB’s Executive Board are also soon up for grabs – Benoît Cœuré (France) sees his term end 31 December 2019 and for Yves Mersch (Luxembourg) it is 14 December 2020. Might it be that a person from Eastern Europe will get one of these positions, which would be a first?

The selection rules speak about persons “of recognised standing in monetary and banking matters” but there is no doubt that also politics interferes.

The three big economies of the Eurozone – Germany, France and Italy – have always been represented on the ECB Board. Spain, the 4^th largest economy has been represented three times while all other original Eurozone countries (from 1999) plus Greece (member from 2002) have had representation once. The last original country to be included was Ireland when Philip Lane replaced Peter Praet (Belgium) earlier this year. A nice summary of who has been on the board and when can be found here.

The seven newest additions to the Eurozone – Slovenia (joining the Eurozone in 2007), Malta (2008), Cyprus (2008), Slovakia (2009), Estonia (2011), Latvia (2014) and Lithuania (2015) have, however, never had a spot on the Council. One wonders if this bias against Eastern Europe might be mitigated, say, by one from the east replacing Mersch? In particular this would work if such a person with the right qualifications would be a woman – another bias of the ECB Executive Board is against women: Of its altogether 21 members since its formation in 1999, only three have been women.

P.S. Is this a really, big life-changing issue? Nah, perhaps not but some of us find it interesting. I mean, there are also people who find cricket fascinating….

 

Morten Hansen is Head of Economics Department at Stockholm School of Economics in Riga and a Member of the Fiscal Discipline Council of Latvia