Finland backs Rehn for ECB vice-presidency, Eurogroup starts working on post-Lagarde era

Brussels – Olli Rehn? Mario Centeno? Between official and potential candidatures, EU economics and finance ministers are beginning to consider the new course of the European Central Bank. Christine Lagarde’s term expires on 31 October 2027, and it is not renewable, but before the ECB president’s seat becomes vacant, the vice-president’s seat will be vacated by Spain’s Luis De Guindos, whose term will end on 31 May 2026. Reasoning for the post-Lagarde era has not yet begun, but starting to think about the first boxes to be filled inevitably triggers broader political games. In the meantime, Finland is trying to play ahead. 

Olli Rehn, a liberal, member of the ECB Board of Governors, has expressed interest in the post of vice-president of the institution. Current governor of the Central Bank of Finland, formerly the Finnish Minister of Economy (May 2015-December 2016), Rehn was Commissioner for the Economy and the Euro (9 February 2010- 1 July 2014) in the second Barroso Commission, showing himself to be a strong defender of rigour and austerity policies. “He is qualified” for the role, argues Riikka Purra, Finland’s Finance Minister. “We support him,” she said publicly on the sidelines of the Eurogroup proceedings, officially opening the all-political nomination process. 

Olli Rehn [photo: imagoeconomica]

A name that is beginning to float around is that of Mario Centeno, a socialist, former Portuguese Finance Minister (November 2015–June 2020), former president of the Eurogroup (January 2018–July 2020), and head of Portugal’s central bank until last month. As far as he is concerned, implicit support comes from the Portuguese Finance Minister, Joaquim Miranda Sarmento. Although he considers it “premature” to start the guessing game over names, he admits that “of course, the government is always pleased when a Portuguese gets international appointments.” 

Greece, too, would be interested in the post vacated by De Guindos, and the current governor of the Hellenic central bank, Yannis Stournaras, would be in the game. A Mediterranean country, from the south, but with an exponent who is now independent but linked to the centre-right (Stournaras was finance minister in the government of Antonis Samaras).

Party and geographical criteria, the race for post-Lagarde

The race for De Guindos’ successor anticipates the one for Lagarde’s replacement. In redefining the composition of the ECB, everything will have to take into account political and geographical balances. The  People’s Party (EPP) won the European elections and reaped the benefits of the vote. It controls the European Commission, the European Parliament, and has eleven heads of state and government in the Council (Austria, Bulgaria, Croatia, Finland, Germany, Greece, Latvia, Luxembourg, Poland, Portugal, Sweden). 

Granting Portugal the vice-presidency of the ECB would mean pleasing socialists and southern countries, not shifting the political and geographical balance to leave the presidency of the European Central Bank to the northern, EPP-led countries. In this race for the post now occupied by Lagarde are the names of the former Dutch central bank governor, Klaas Knot, and the Bundesbank president, Joachim Nagel. The former is a technician; the latter is an exponent of the German SPD and therefore not in the best condition to get the job. Not to mention that Germany, with Ursula von der Leyen, already has the EU executive. They do not seem to be the real candidates, therefore, but that will take time. 

In this jigsaw puzzle, the name of Boris Vujcic, Governor of the Central Bank of Croatia, may not help. The Croatian would be in the running for the role of vice-president of the ECB, but he was confirmed at the head of Croatia’s central bank by Prime Minister Andrej Plenkovic, EPP. With the vice-presidency going to the Populars, the EPP would find it more difficult to keep the Eurotower presidency (Lagarde belongs to the European Popular family). In any case, the composition of the ECB has already largely enlivened the work of the economic ministers gathered in Brussels for a Eurogroup meeting ahead of the Ecofin Council meeting.