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Berlin guns for top ECB job amid EU wrangling

AFP · 19 Nov 2009, 14:59

Published: 19 Nov 2009 14:59 GMT+01:00

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Berlin has held back from promoting German candidates for EU president or the 27-nation bloc's new foreign policy supremo that are set to be appointed over what promises to be a lengthy dinner in Brussels on Thursday evening.

But observers believe Germany could be saving itself to push for the top job at the ECB – arguably the most influential EU post, as the president governs monetary policy for all the countries that share the euro.

"Germany could well be keeping its powder dry to take the ECB," said Gilles Moec, chief ECB watcher at private German bank Deutsche Bank.

Werner Hoyer, a senior official in the German Foreign Ministry, hinted as much this week.

"When this has been settled, there will be a number of other positions to fill and Germany attaches a great deal of weight to playing a corresponding role," Hoyer was quoted as saying.

The ECB president has real power, setting interest rates in the world's largest trading bloc for well over 300 million people in the 16 EU member states using the euro single currency.

According to Forbes' most recent list of the world's most influential 67 people, the current president, Jean-Claude Trichet, ranked 25th, well ahead of British Prime Minister Gordon Brown or French President Nicolas Sarkozy.

Only German Chancellor Angela Merkel and Italy's Silvio Berlusconi ranked higher among European leaders, while European Commission President Jose Manuel Barroso did not make the cut.

In the 11 years since its creation, the ECB has won over early sceptics in the financial markets to gain a reputation of solid competence, and is widely seen to have had a "good" financial crisis.

Moreover, with more countries set to join the eurozone in coming years, the job is only set to grow in importance, particularly with the euro gaining ground on the dollar as a major reserve currency.

"The ECB president is and will remain one of the most powerful European voices in global policymaking," said Marco Annunziata, chief economist at Italian bank UniCredit.

"The crisis has underscored even more the crucial and difficult role that the ECB plays in European policymaking. Going forward it will be even more important," he said.

But although Berlin managed to get the ECB based in the German city of Frankfurt, the bank's two presidents so far have been a Dutchman and a Frenchman, the late Wim Duisenberg and Trichet. It is therefore logical that when Trichet steps down in November 2011, Germany will be gunning for one of its own to be top dog at the ECB.

It is far from certain that Germany will get its wish, however, with the country's most obvious candidate, Bundesbank head Axel Weber, occasionally ruffling feathers with his constant talk about inflation.

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Italy, another EU big hitter, also has a candidate up its sleeve whom observers say might be a more popular choice: Mario Draghi, currently governor of the Bank of Italy.

"It is going to be a very tight race – in my opinion Draghi is the most qualified, but it will be a hard competition," UniCredit's Annunziata said.

Rome has even already launched a preliminary salvo, with Foreign Minister Franco Frattini declaring how "honoured" he would be if Draghi could fill Trichet's shoes.

Berlin was not amused, with a spokesman for Chancellor Angela Merkel pointedly responding: "The government sees no reason to begin a debate about Trichet's successor two years in advance."

It insists that its position has not changed, but in the capitals of Europe, others are not so sure.

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