Donohoe withdraws Lane from race for senior ECB job

Central Bank governor Philip Lane has been withdrawn as a candidate for the vice-presidency of the European Central Bank by Minister for Finance Paschal Donohoe.

Speaking ahead of a meeting of euro-group ministers in Brussels the Minister said that in the interests of consensus he felt it necessary to withdraw the nomination, although Mr Lane had received wide support from ministers. He was confident, he said, that Mr Lane would be able to serve the ECB at some stage in future. The position of chief economist is due to come up shortly.

“In contacts with my finance minister colleagues in advance of today’s meeting, I received very positive feedback and expressions of support in relation to the candidacy from many member states who acknowledged how well qualified Philip would be for the position,” Mr Donohoe said.

“However, I believe that it is crucial that the election of a new vice-president for the ECB is based on consensus, and should not be a source for any disagreement. In that context, I have decided that, on balance, it would be in the interests of the euro area as a whole to withdraw Philip’s candidacy in advance of any vote.”

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Government sources said Ireland did not have enough votes for Mr Lane to win and saw no point in causing a row. Not pushing the contest, it is felt, would help Ireland with its European colleagues further down the line if Mr Lane or others were to seek positions.

Mr Lane is expected to be a candidate when ECB chief economist Peter Praet leaves his position next year.

It was also claimed that Mr de Guindos had an advantage in that he was a government minister, whereas Mr Lane had no political experience.

Formal nomination

A spokeswoman for the Central Bank said the g

overnor welcomed the opportunity to participate in the process and would now return to business as usual at the bank, and as a member of the ECB governing council.

The Spanish candidate, economy minister Luis de Guindos, was set to receive ministers’ unanimous backing on Monday. He will be formally nominated at the Ecofin meeting on Tuesday and approved at the European Union summit at the end of March.

He would do a fine job, said Mr Donohoe, who rejected claims that the appointment of a minister to the ECB’s governing council could affect the bank’s political independence.

Mr Lane had won strong support among MEPs last week when he made a presentation to their economic affairs committee, but the MEPs’ role in the appointment is purely advisory. They will interview Mr de Guindos again next week.

The euro-group meeting also discussed the findings of the eighth post-programme surveillance mission to Ireland, which took place last November. “There was acknowledgement from the report . . . that the Irish economy continues to be performing positively,” the Minister said.

“It does point to the work we need to continue to do in terms of taking a careful approach to our national finances and investing in public infrastructure in the future.”

The report was positive about the Irish economy but warned of “risks to the economic outlook relating primarily to the outcome of the negotiations regarding the UK’s exit from the European Union and potential changes to the international taxation environment. Risks could also arise in the event of continued strong increases in property prices over the medium term.”