Yesterday, the deadline expired for nominating candidates to succeed Vítor Constâncio as Vice President (VP) of the ECB. The position is the first of a total of four seats on the ECBs board that are up for change until the end of next year (see diagram at the end of this piece). The choice is between long-time favourite, Spains Luis de Guindos, and Irelands Philip Lane.
We review the election process, candidates and their stances on monetary policy.
The process
The figure below shows the current outline for electing the new VP. The process could be delayed although we do not expect this at the current juncture.
Steps 1 and 2. The head of the Eurogroup (European finance ministers) initiated this process on 22 January, calling for euro area members to nominate at most one candidate from each country, with yesterday (7 February) as the deadline.
Step 3. The Eurogroup will convene on 19 February to assess the final two candidates (de Guindos and Lane) and recommend one to the European Council. The following day, the Ecofin council will, on a qualified majority, vote on the recommendation (14 of 19 euro area countries need to be in favour, with at least 65% of the population in the euro area).
Step 4. The recommended candidate receives an assessment from the ECB and will be faced with a hearing in the European parliament. This is the point at which the most resistance to a decision will be apparent. In particular, we expect the gender-balance discussion to emerge. Recall that in 2012, with board member Yves Mersch being elected, the process was prolonged for months due to the gender-balance discussion (only one of the boards six positions is held by a woman). The parliament cannot veto a candidate but could delay the process. If the process carries on beyond 1 June, the ECB board will consist only of five members until the new is appointed.
Steps 5 and 6. The decision is expected to be taken on 22 March by the European Council with the new Vice President anticipated to commence on 1 June 2018.
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