FrankfurtAt the beginning of the year the world was still fine for Jens Weidmann. At that time, the president of the Bundesbank seemed to be the big favorite for the succession of the Italian Mario Draghi as head of the European Central Bank. In a Bloomberg survey among economists, he was far ahead of the 100 possible points in February.
By far the French Federal Reserve chairman François Villeroy de Galhau followed in second place with only 26 points. But since then, the chances that Weidmann won his career in November 2019 with the top job of the ECB have dropped considerably.
As Handelsblatt reported on Thursday with high government circles, the priorities of Chancellor Merkel have now changed: they want to force a German rather than a European Commission President.
For example, the race for the successor of Draghi is completely open again. "There is no clear favorite at the moment," says Dirk Schumacher, the European economist at the French investment bank Natixis, who previously worked for the ECB.
Most observers expect the decision to be taken after the European elections in May 2019. This is mainly because staff are expected to be part of a larger package. After the elections, the two positions of the President of the European Commission and the President of the EU Council will also be fulfilled.
But other items will probably also play a role, such as the end of the month, when the deadline for applying for the successor to the French Danièle Nouy ends as head of the ECB Banking Supervision, which leaves the end of the year.
The most promising competitor of Weidmann was previously the French central bank manager Villeroy. The Frenchman is more of a pragmatist in the field of monetary policy. He supported and defended, for example, the huge purchases of bonds by the ECB. This would facilitate communication, especially in southern Europe.
Weidmann is especially the Italians as a red cloth. When he warned of the consequences of excessive public debt during a lecture in Rome in the spring of 2016, the Italian newspapers wrote about a "torpedo from Germany" and remarked: "The Bundesbank is sticking Italy to ice."
On the other hand, Villeroy has close ties with Germany. His family has roots in Saarland and he speaks German very well. In lectures he sometimes flirts with it and says sentences like: "I love Germany, I love this language."
But to him he says that he is rather a confidant of the former French president François Hollande than of his successor Emmanuel Macron. Moreover, Jean-Claude Trichet already had a president of the ECB from France.
However, Berenberg's chief economist Holger Schmieding does not see that as a big problem: "If French President Macron wants to put his political weight in the balance, Villeroy would stand a good chance," he says.
The nationality spokesman also speaks against another French candidate: ECB board member Benoît Cœuré. In 2015 he had a duel with Villeroy for the leading position at the French Banque de France. He also argues that the EU treaties contain a clause stating that the term of office of a member of the Executive Board is eight years and can not be extended.
How accurate the legal situation is, but is considered unclear. The ECB does not have an official legal position. This should ultimately clarify the legal service of the EU Council. Many believe, however, that a solution could be found. If the EU leaders agree on Cœuré, he would be able to leave his previous post in the board shortly after the European elections and then, on 1 November, Draghi succeeds.
Cœuré enjoys an excellent reputation with the ECB and would not need any training in the central bank. His position usually coincides with the majority of the Governing Council of the ECB, but lately he has more often fought a tighter course.
So far, the favorites for the ECB Presidency came from Germany and France. Small countries, in particular, see it as very critical when both countries share the most important items. That is why a compromise candidate from a smaller country would also be possible. One of them would be about the Dutch Klaas Knot. Like Weidmann, this is probably a proponent of a tighter monetary policy. This could reassure critics of the loose monetary policy in Germany.
Knoop would have the advantage that he is largely unknown in Southern Europe and therefore would expect less resistance from this region than Weidmann. But Knot, like Weidmann, often held a minority position on the ECB's board.
This can lead to problems because he can often be overruled as president. In contrast to the Bundesbank, Banque de France and ECB, the Dutch central bank is also relatively small. However, Knot has not proven that he could lead such a large organization.
In addition to Knot, the Irish central bank manager Philip Lane and his Estonian counterpart Ardo Hansson get outsider opportunities. Both have a good academic reputation, but Estonia and Ireland do not have a big lobby in Brussels. Both Lane and Hansson would therefore probably be candidates for the succession of Peter Praet as the chief economist of the ECB.
Whatever the final outcome of the race, many economists believe that this would not have a major impact on the monetary policy of the ECB. But not everything: "More than ever we do not expect a classic rate hike cycle," writes economist Jörg Krämer of Commerzbank in view of the declining opportunities of Weidmann. The ECB has announced that it intends to phase out its multi-billion bond purchases by the end of the year. However, the key interest rates at least want to leave the end of the summer of 2019 at the previous level of zero percent.
Berenberg & # 39; s chief economist Holger Schmieding considers the consequences of a change in leadership for monetary policy to be "extremely low". He sees differences mainly in a crisis, sometimes depending on the quick reaction of the person at the top. In the same way Dirk Schumacher expressed. "At the end of the day, much of the data will determine the path of monetary policy." And the data does not obey any nationality whatsoever.