FRANKFURT/MADRID (Reuters) - Spain is considering proposing a female candidate to head the euro zone’s permanent rescue fund in a bid to avoid being left without a top euro zone job as its hopes of clinging onto its seat on the European Central Bank board look to be fading.
The euro zone is set for a major reshuffle of some of its top positions, with the chair of the Eurogroup of finance ministers and the head of the European Bank for Reconstruction and Development also up for grabs alongside key posts at the ECB and the European Stability Mechanism (ESM).
Two well-placed euro zone sources, one at the ECB and one in Spain’s economy ministry, said that Spain was now looking to take advantage of the lack of female representation in top euro zone jobs by putting forward a woman to head the new euro zone bailout fund, the ESM. They did not say who the candidate might be.
The proposal, however, is only likely to be made if Germany’s Wolfgang Schaeuble becomes head of the Eurogroup of finance ministers, the job currently held by Jean-Claude Juncker, whose term is due to end in June.
The departure of Juncker, Luxembourg’s prime minister, would remove a major hurdle for Yves Mersch, the country’s central bank governor, to take over on the ECB executive board when the term of Spain’s Jose Manuel Gonzalez-Paramo ends in May.
Luxembourg, with a population of less than 600,000, is unlikely to be allowed by its larger neighbors to hold two major euro zone positions.
“The consensus (at the ECB) now seems to be for Mersch,” said one well placed source, who spoke on condition of anonymity.
“The talk now is that Spain could put forward a ‘technical’ candidate who is a woman for the ESM. I don’t think they would accept a promise of something later, they would want to have something now,” he said.
Madrid’s bid to keep its place on the ECB board appears to have faltered badly.
It proposed the ECB’s top lawyer Antonio Sainz de Vicuna as its candidate but his lack of direct monetary policy experience has been exposed during a recent campaign tour around euro zone capitals, according to one central banking source.
Mersch, the long-serving Luxembourg central bank governor, in contrast is one of the most experienced of the ECB’s 23 policymakers. He also ticks the box for of those looking to rebalance the split between anti-inflation policy ‘hawks’ and growth focused ‘doves’ on the six-member ECB Executive Board.
A spokeswoman for Spain’s economy minister Luis De Guindos confirmed that Spain was weighing up the ESM position and said it didn’t want to be left without a top job.
“This is definitely not enough to get a promise,” she said, adding that “in case we decide to present a candidate for the ESM we’ll try to look for the right profile.”
Whilst not explicit, the right profile is expected to be a woman. With not a single woman in the ECB’s 23-member governing council or heading any of the bloc’s other major institutions, it could clinch victory for Spain.
Much, however, depends on Germany’s intentions.
German Klaus Regling currently heads the European Financial Stability Facility (EFSF), the forerunner for the permanent ESM bailout fund, and is only likely to be sacrificed by Angela Merkel if Schaeuble takes the job as head of the Eurogroup.
Thomas Mirow, another German, has also staked his claim to stay as head of the European Bank for Reconstruction and Development, a position France as well as Poland would like to have.
Finance ministers had been expected to reach an agreement on the ECB position at their meeting in Copenhagen this weekend. However, with jockeying still going on for all four positions and France’s presidential race proving a possible obstacle, some believe it could be delayed.
One of the central bank sources said the ECB position would not be decided without a decision on the Eurogroup position.
Additional reporting by Annika Breidthardt and Ilona Wissenbach; Editing by Susan Fenton