Constâncio will succeed current European Central Bank (ECB) Vice-President Lucas Papademos, a Greek whose mandate expires in May. The Portuguese pipped other candidates including Belgium's Peter Praet and Yves Mersch of Luxembourg to the post.
An economist and a former member of the Portuguese parliament, the 66-year-old Constâncio favours low interest rates and will likely be a strong advocate of an expansionary monetary policy, say ECB watchers.
As vice president, he will be the second-ranking official on the six-member executive board that manages ECB operations.
Portugal puts Germany at ECB helm
Constâncio's appointment has tipped the balance of the presidency race in favour of German candidate Axel Weber (EurActiv 11/02/10).
The current president of the ECB, Jean-Claude Trichet, will step down on 31 October 2011, with a vote on the post expected in June of that year.
The two candidates known to be interested in succeeding Trichet are Weber, president of the German Bundesbank, and Mario Draghi, governor of Banca d'Italia, who are both members of the ECB's governing council (see 'Background').
For the sake of geographical balance, if the vice-president comes from southern Europe, the ECB president cannot be a southerner too. Though this is not an official procedure, it is an unwritten convention, say sources close to the Council.
This would automatically exclude the popular Italian candidate Mario Draghi from the race for the presidency and clear the way for Weber's appointment. Officials close to the negotiations also say that Italy was not in favour of Constancio's appointment for this very reason.
Southerners already 'well represented'
According to a document seen by EurActiv last week, German Finance Minister Wolfgang Schaeuble has been making a concerted push for his candidate, Weber, to secure the presidency.
Schaeuble's plan, according to the document, was to support the Portuguese candidate for ECB vice-president, strengthening Weber's case.
In his note circulated among German sherpas, Schaeuble stressed that southern European countries are already "well represented in the executive board" of the ECB, with three of the six members.
Draghi is governor of the Italian Central Bank and is also chair of the Financial Stability Board, a body which aims to govern global finance.
If he were appointed, the Italian would become the first southern president of the ECB, since the chair has so far been held by the Netherlands and France (see 'Background').
