MEPs raise concerns over Spain’s ECB candidate

The European Parliament has raised concerns about the suitability of Spain’s Luis de Guindos as the next vice-president of the European Central Bank as finance ministers are poised to recommend him for the job. 

Mr de Guindos, Spain’s finance minister since 2011, is likely to win the two-horse race to become Mario Draghi's deputy by securing backing from his eurozone peers at a meeting on Monday, according to senior EU government officials. 

However his rival for the job, Philip Lane, governor of Ireland’s central bank, won the backing of senior members on the parliament’s economic and monetary affairs committee, which held a closed-door hearing with the two candidates in Brussels on Wednesday. 

The candidates were grilled on their approaches to monetary policy, with some MEPs expressing “reservations for minister De Guindos's appointment”, said Roberto Gualtieri, the committee’s chairman.

Mr Lane, who is an academic economist, was the “more convincing” of the two hopefuls, said Mr Gualtieri.

MEPs’ reluctance to support Mr de Guindos reflects his lack of monetary policy experience. Before becoming finance minister in the centre-right government of Mariano Rajoy, he worked for Lehman Brothers in Europe and for PwC, the audit firm. 

ECB insiders are also concerned that a direct appointment from a national finance ministry risks undermining the bank’s prized independence from political interference. 

The European Parliament has no formal veto over ECB appointments. Instead, EU leaders will rubber-stamp the recommendation of eurozone finance ministers, who will pick their preferred candidate at a eurogroup meeting on Monday.

The appointment of Vítor Constâncio’s replacement as ECB vice-president kicks off a merry-go-round of senior vacancies to be filled at the Frankfurt institution, including a president to succeed Mr Draghi in 2019.

Mr de Guindos has long been favourite to replace Mr Constâncio, as Spain does not have a seat on the ECB’s executive board.

The Spanish minister has the backing of France and Germany, along with a number of other member states, meaning he is likely to pass the threshold of support needed to secure the post. Under the EU’s complex voting rules, a candidate needs the backing of 14 member states representing 65 per cent of the population of the eurozone.

A senior EU official said finance ministers were very keen to pick a candidate “without a vote being held”. A key decision for Dublin is whether Mr Lane should withdraw from the race, allowing Mr de Guindos to be appointed by consensus.

Dublin insisted it had no plans to withdraw Mr Lane’s nomination. “We will be continuing to seek support for the candidate across the coming days,” said a spokeswoman for Ireland’s finance ministry.

Should he fail to land the slot of vice-president, Mr Lane is thought to be eyeing the ECB’s chief economist post, which falls vacant next year. The Irish central banker is seen as one of the best economists on the ECB's governing council, which he joined in 2015.

Additional reporting by Arthur Beesley