Failure to secure the vice-presidency of the European Central Bank will have been a blow to the ambitions of Central Bank governor Philip Lane, though he does live to fight another day.
Spanish economy minister Luis de Guindos was always the favourite for the vice-presidency, even if Lane’s academic credentials, particularly in the area of financial stability, made him a strong candidate.
The big countries rowed in behind Spain, partly because the Spanish were seen to be “owed one” and also – in the way of such things – having a southern European in this job makes it more likely that a northern European will get the ECB presidency when Mario Draghi’s term ends in October 2019. And that suits both Germany and France.
Minister for Finance Paschal Donohoe withdrew Lane's name before the issue was formally discussed by euro zone finance ministers, with only three or four countries believed to have committed support to the Republic at that stage.
For Lane, the next obvious move would be to go for the post of ECB chief economist.
The current chief economist, Peter Praet, is due to retire in May 2019, meaning the competition would be run in a year's time. There has been some speculation in European circles that he could seek to retire early, perhaps at the end of this year. However it remains unclear whether this will happen.
Lane would be a strong candidate, with excellent academic credentials. But we do not know who else will be in the field. This will be all about politics – again – and the ECB is also under pressure to appoint more women to senior positions. Indeed Sharon Donnery, deputy governor at Central Bank of Ireland, is also a possible candidate for a senior ECB position. As well as the chief economist and president's jobs, another executive board position and also the head of the ECB regulatory arm – the Single Supervisory Mechanism – also comes up to be filled next year.
The intriguing question is whether, when the musical chairs stop, Ireland will, for the first time, have a seat on the ECB board at the end of it. The appointment to the vice-presidency is a warning that, in the political bear-pit, being the best qualified candidate only gets you so far when the big countries start carving up the big jobs.
