The Brief – The ECB is coming home… to Germany

The Brief is EURACTIV's evening newsletter.

Until recently, Germany has always been willing to take a step back and support an ally for a top job. But Berlin has been marshalling its political resources around securing the European Central Bank presidency for one of its own when Mario Draghi steps down next November.

Germany, for example, backed Dutch Finance Minister Jeroen Dijsselbloem for president of the Eurogroup.

The fact that Frankfurt’s bid to host the London-based European Banking Authority lost out to Paris – the first piece of post-Brexit booty to be offered to the EU-27 – only strengthened the German case.

“The big guys now want to get their portion, as well as the senior jobs in the EU institutions,” a senior Frankfurt-based banker told this correspondent.

Germany has two potential candidates. The obvious one is Bundesbank boss Jens Wiedmann, who has spent much of Draghi’s term waging the closest thing central bankers get to war on the Italian’s quantitative easing and bond buying programmes. Wiedmann has been eyeing the job for years. But he could be joined in the race by veteran former finance minister Wolfgang Schäuble, now speaker of the Bundestag.

Dividing the top EU jobs is always a delicate balancing act, geographically and politically, particularly when it comes to the economic posts.

That is why Portugal’s centre-left Finance Minister Mário Centeno took over from Dijsselbloem in January, and why the ECB’s Vice-Presidency had also been ear-marked for a South European, the centre-right Spanish Economy Minister Luis de Guindos.

The European Parliament, as ever, wants to throw a spanner into the works.

De Guindos’ rival for the gig, Ireland’s Central Bank governor Philip Lane got the seal of approval from MEPs on the European Parliament’s influential Economic Affairs committee after a behind-closed-doors hearing on Wednesday.

However, De Guindos appears to have the diplomatic muscle behind him even if MEPs ‘expressed reservations’ about him, boasting the support of France and Germany and a handful of smaller member states.

The Parliament cannot veto the appointment and finance ministers are almost certain to ignore the MEPs when they choose the winner on 19 February.

Having a German chief in Frankfurt would have been unthinkable a few years ago. But the ECB is not as powerful (nor as political) an institution as it was in the dog days of the Eurozone crisis in 2011 and 2012, when the Commission dithered, Berlin blocked, and Draghi was one of very few to emerge with credit.

That is undeniably a good thing. And with Europe’s economic ship now sailing in far more benign waters – Eurostat confirmed that the eurozone grew by 2.7% last year – the ECB can probably get away with having a disciple of the Bundesbank ‘old school’ at the helm without terrifying the markets, and the Club Med. The ECB is coming home… to Germany.

The Roundup

Despite Brexit, EU governments would be wise to increase spending and aim at closing the funding gap in the EU’s next seven-year budget, according to budget boss Günther Oettinger. Real talks begin next week on Friday.

As Serbia aims to join the EU by 2025, it will need to accept the independence of Kosovo, its former province, German Foreign Minister Sigmar Gabriel reiterated in Pristina. EU money is being put to good use in Albania.

While talks between leaders of Croatia and Serbia produced few spectacular results this week, analysts say that coming face to face was a good start, particularly for EU membership hopeful Serbia.

French President Emmanuel Macron has his eyes on Brussels. Whether this involves creating a new party or joining forces with the liberals, a lot of obstacles lie in his way.

Luxembourg’s national language is making a comeback and fighting for official European Union recognition. Here you can prepare for this eventuality.

A new OECD report warned that current taxation levels are not enough to fight climate change effectively, so governments have been urged to start taxing CO2 emissions more aggressively.

France is thinking about rolling out a voluntary product “lifetime” label for everything from tights to iPhones. But it could only be legally binding if adopted at EU level.

US defence chief Jim Mattis insists that European NATO allies step up efforts and show more commitment to military budgets as troop contributions to missions did not exempt them from broader spending goals.

How do you manage a career while raising children? The Czech Republic wants to address the gender pay gap but there’s still more to be done to increase women’s participation in the labour market.

A UK-led project to reduce deaths linked to childbirth has won a prestigious prize awarded by the EU worth €500k. A more than worthy cause.

Look out for…

The annual Munich Security Conference kicks off tomorrow. UN Secretary General António Guterres, EU Commission President Jean-Claude Juncker, High Representative Federica Mogherini and NATO Secretary General Jens Stoltenberg will all be in Bavaria.

Views are the author’s

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