Luxembourg Scoops ECB Job As Part Of Spain Deal
By EurActiv
(EurActiv) — Luxembourg won out last night (9 July) as eurozone ministers agreed that Prime Minister Jean-Claude Juncker should continue to chair the group, whilst his compatriot Yves Mersch will join the European Central Bank’s six-member executive board.
Juncker, who has been fire-fighting the crisis in the eurozone for almost three years, has told reporters that he is unlikely to remain for the full two-and-a-half-year term, and could retire from the position towards the end of the year, leaving the position vacant at that point.
Wolfgang Schäuble, the German finance minister – always considered a possible replacement for Juncker – and French finance minister Pierre Moscovici could then take turns to replace him in a kind of jobshare, according to some reports.
The appointment of Mersch, the head of the Luxembourg Central Bank, follows a protracted squabble with Spain over the ECB position, with Madrid pushing for its nominee, Antonio Sainz de Vicuna.
Spanish lose out in game of musical chairs
The vacancy on the ECB board was created by the departure of Spain’s José Manuel González-Páramo. Spain will therefore lose key influence within the ECB at a critical moment as the Frankfort-based institution will play a major role in the forthcoming recapitalisation of the country’s banks.
Mersch is known for his hawkish stance on inflation and his appointment was supported by other northern eurozone member states.
EurActiv understands that Luxembourg threatened to remove discussion of the Spanish bail-out from formal discussion on the agenda of European finance ministers today (10 July) unless Mersch’s appointment was agreed, putting the Spanish in an awkward bargaining position.
As expected, ministers also confirmed that Klaus Regling, the German managing director of the temporary European Financial Stability Facility (EFSF), should also lead its successor organisation, the European Stability Mechanism (ESM).
The ESM is due to be launched this summer after ratification in participating countries. The German constitutional court will issue a key ruling on the ESM treaty later on today (10 July).
