Baltic Business Research

Sammanfattning

I min blogg från den 14 februari diskuterade jag namn och förutsättningar avseende den Europeiska Centralbankens kommande president. Två av mig framförda kandidater – Erkki Liikanen från Finland och Luxembergs Yves Mersch – har under tiden ropats tillbaka av sina regeringar. Liikanen var min egen huvudkandidat, då han representerar ett ekonomiskt rätt välbalanserat land och Luxemburg under lång tid varit bortskämd med EU-toppositioner.  Italiens kompetente centralbankschef Mario Draghi kommer däremot från ett land med ekonomiska bekymmer. Draghi skulle som ECB-chef kunna hamna i  obehagliga beslutssituationer – om Italien under de kommande åtta åren skulle råka ut för en akut skuldkris! Han må vara likväl vara favorit nummer ett i dessa dagar – men ännu så länge bör inte uteslutas att Nederländernas erfarne centralbankschef Nout Wellink eller en just nu förbisedd tysk eller till och med fransman som skulle kunna överraska både media och finansmarknader. Mycket står på spel – kanske till och med ECB:s trovärdighet. Det vore bra om Finland kunde visa mer intresse för ECB-chefsjobbet. ECB:s framtida trovärdighet är mycket viktig även för i stort sett samtliga länder kring Östersjön.

————————

In my last blog from February 14, I looked at some names and preconditions what concerns the forthcoming new president of the ECB. As a major precondition, I mentioned that Mr. Trichet’s successor should come from a country that is not running real risks of becoming negatively involved in a burdening debt crisis.

During the past week, however, I had to notice that acceptable candidates like Erkki Liikanen from Finland and Luxemburgs Yves Mersch have been taken away from the list of candidates by their own ministers of finance. These steps may have been premature. It could be smart if particularly Finland could re-consider its fading own interest in one of the most important European institutions.

1. For the moment, I do not see any strong candidate anymore who can meet all the necessary criteria for the ECB presidency. At the same time, we know that no decision can be made without the acceptance of Germany and France.

2. Practically, “everything” now seems to be open for Italy’s competent central bank leader Mario Draghi. His disadvantage, however, is that Draghi comes  from a country that – at least theoretically – can become part of a debt crisis in the forthcoming years. Of course, it would be much better to recruit a president to the ECB from a country that is characterized by a relatively healthy and stable public debt situation. But you never know:  stable today may develop into unstable tomorrow. 

3. If Draghi cannot make it, Germany, the Netherlands, Austria and France should stand for the remaining candidates. However,
– Nout Wellink from the Netherlands has reached the age for retirement;
– Trichet from France will leave the office in Frankfurt  (and another French leader comes directly after him?);
–  a very anonymous, quite distant compromise candidate should not be completely forgotten: Athanasios  Orphanides from Cyprus. Orphanides is an excellent academic and a central banker I appreciate a lot. He’s strongly qualified. But his past as an adviser to the Fed may disqualify him in the eyes of a number of European decision-makers. By the way, Cyprus has no severe macroeconomic imbalances. But the public debt situation is deteriorating. 

4. Are there any still forgotten strong candidates? From France – not so realistic – Managing Director Dominique Strauss-Kahn from the IMF could be a good theoretical candidate for president Sarkozy – also in order to avoid him as a presidential candidate for the forthcoming presidential elections in France. However, strategic internal French “games” will chancellor Merkel certainly not be interested in.

5. Thus, Merkel and other heads of government probably would not appreciate two French heads of the ECB in a row. So, it might happen that Merkel still is looking for a broadly acceptable German candidate. But experienced Klaus Regling – CEO of the European Financial Stability Facility – has no experience as a central banker. Jürgen Stark is already member of the Executive Board of the ECB. Following strictly the rules of the Maastricht Treaty would mean that Stark would get only three years for the presidency (which certainly weakens his odds substantially).  Stark could be a compromise – but not a really hot one.

6. Of course, I know one or two more Germans who could get Mrs. Merkel’s confidence for the ECB mandate. The German chancellor has been surprising before – and it could happen again. There is no doubt that the next president of the ECB will have the commitment and the burden to avoid any weakening of the credibility of the ECB. Therefore, politicians must contribute to creating the conditions for a continued positive status and reputation of the ECB. Mario Draghi needs such assistance as well.

Mario Draghi could be a successful president of the ECB. But Italian politicians must support him by doing their homework much more efficiently!