Possible candidates for ECB president

15th February 2011, Comments 0 comments

German central bank governor Axel Weber's dramatic withdrawal from the race to become the next head of the European Central Bank (ECB) has thrown the field wide open.

Weber pulled out Friday from a race many said was his to lose, heightening the hunt for the next chief of the world's second most powerful central bank after the US Federal Reserve.

The decision on a successor for French incumbent Jean-Claude Trichet, who steps down at the end of October, is to be made in the coming months by European heads of state and government,

German Chancellor Angela Merkel must quickly decide whether to propose another candidate from Europe's biggest economy.

Her spokesman Steffen Seibert said Monday: "For the government what is important is that Mr Trichet's successor shares our fundamental German convictions on a stable currency, what one does for that, and on tackling inflation.

"The passport is not the main thing."

Others are not so sure.

"In the coming days and weeks, there will be a lot of multi-dimensional horse trading," ING senior economist Carsten Brzeski told AFP.

"As so often in Europe, filling a top-job vacancy does not always simply mean finding the best person for the job."

Berenberg Bank chief economist Holger Schmieding pointed out that Germany would be asked to provide substantial funding for debt-laden eurozone partners in the years to come.

"It would be an advantage if the ECB president could explain to the German public and parliament in their own language why German taxpayer money needs to be put at stake," he told AFP.

"This is, of course, not the decisive criterion," Schmieding stressed.

The following figures are currently those cited most often as possible candidates to succeed Trichet.

The first three -- and the last -- have the advantage of already being members of the central bank's governing council.

Mario Draghi -

Head of the Italian central bank and initially presented as a front-runner along with Weber, he is the current chairman of the Financial Stability Board, a global body set up to develop regulatory and supervisory policies.

Draghi has shown he can manage a large organisation and achieve consensus among its disparate members, a challenge similar to the one presented by the ECB.

But ECB vice president Vitor Constancio is from Portugal, another southern European country -- and European institutions typically strive for geographical balance among top figures.

Heavy Italian debt is another disadvantage for Draghi, as is his past with US investment bank Goldman Sachs, which some have alleged helped Greece shield its unsustainable financial situation from outside scrutiny.

Erkki Liikanen -

Finland's former finance minister and head of the central bank of Finland.

He was also a European commissioner for nearly a decade, holding the financial programming and budget, and enterprise and information portfolios.

The Finnish daily Helsingin Sanomat said "one possible hindrance might be his strong identification with the Social Democratic party."

Observers note it might also be hard for someone from one of the smaller eurozone countries to be named head of the ECB.

Yves Mersch -

Head of the central bank of Luxembourg since 1998 and a former International Monetary Fund official.

A compromise candidate possibly acceptable to Germany owing to his command of the language and staunch position on fighting inflation.

Some say however that Mersch might struggle to manage a high-powered group such as the ECB's 23-member governing council.

Klaus Regling -

German head of the European Financial Stability Facility, a body that borrows money on markets to help heavily indebted eurozone governments obtain better rates.

The EFSF is to be replaced in 2013 by the European Stability Mechanism.

Highly regarded, Regling nonetheless lacks central bank experience.

Although a low-profile figure seen as someone who could follow in Trichet's consensus-seeking footsteps, some say Regling's nomination would be seen by financial markets as a purely political move.

Juergen Stark-

Another German, currently chief of the ECB's economics unit. He has been tipped as a possible replacement for Weber at the Bundesbank, and is limited by ECB statutes to serving for no more than eight years on its executive board.

That means Stark could only work as ECB president for three years, if the statutes allowed for a transfer of post, which is not certain.

Nout Wellink -

Head of the central bank of the Netherlands, for some, a dark-horse candidate. The first ECB president, Wim Duisenberg, was also Dutch, which seriously diminishes Wellink's chances.

© 2011 AFP

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