ECB Ambition Fulfilled for Mersch as Bowles’s Gender Fight Rages

Luxembourg Central Bank Governor Yves Mersch
Yves Mersch, governor of Luxembourg's Central Bank. Photographer: Jock Fistick/Bloomberg

Yves Mersch is about to fulfil an ambition denied to the Luxembourg central bank governor for months in a fight over gender politics as he fills the vacant slot on the European Central Bank’s Executive Board.

After the longest battle over an appointment in the Frankfurt-based ECB’s 13-year history, the 63-year-old will tomorrow officially change job and become the sixth member of the central bank’s management team. His first working day will be Dec. 17, and the first Governing Council gathering he will attend in his new role takes place two days later.

With Mersch claiming his desk in the Eurotower, as the ECB’s headquarters is known, the Executive Board will have a full complement for the first time since May. The delay followed a wrangle over candidates between euro-area finance ministers, and then the objection of European Parliament lawmakers at the lack of senior women at the ECB. Sharon Bowles, the Parliament’s Economic and Monetary Affairs Committee chairwoman, has pledged to intensify pressure on the matter.

“If anything, Parliament’s resolve has been stiffened,” she said in a telephone interview from Strasbourg, France. “I really hope that the next time a very senior position comes up we won’t have to insist again, but we will if we have to. Frankly, it’s getting ridiculous at this stage.”

All 17 central bank governors in the euro area are male, as are the other members of the ECB Executive Board, and few of its senior managers are women. The ECB added a female senior official on Oct. 19 when it hired Christine Claire Graeff as director general for communications and language services.

No Vacancy

Two women, Sirkka Haemaelaeinen of Finland and Gertrude Tumpel-Gugerell of Austria, have sat on the ECB board. Assuming current members serve full terms, the next chance to appoint a woman won’t be until Vice President Vitor Constancio steps down in June 2018.

ECB President Mario Draghi conceded on Nov. 8 that on gender diversity, the institution “should improve at management level.” He said it has launched a number of initiatives “to encourage female staff to pursue management functions.”

Bowles said that she has met with female ECB managers who have complained about lack of promotions at the central bank.

“There is no rhyme or reason for it,” she said.

The shift of sweeping new powers to supervise banks agreed by finance ministers yesterday to help stem the debt crisis might still provide a chance to focus on appointing women. The new supervisor should be ready by March 1, 2014. Mersch’s future colleague on the Executive Board, Joerg Asmussen, said on Oct. 1 that the new institution will create “a good opportunity” to put more women into top posts.

Portfolio Choice

Mersch’s own responsibilities at the ECB have not been determined yet, an ECB spokesman said. Draghi will have the option to transfer oversight of the ECB’s legal portfolio to Mersch, who is a lawyer by training.

Mersch, the longest-serving central-bank chief in the euro area, has recently broken ranks with his traditional inflation-fighting ally, the Bundesbank, to defend the ECB’s new bond-purchase program, which the German central bank opposes. He said on Oct. 23 that the Bundesbank’s critical stance has “led to uncertainty and confusion in large parts” of Germany.

While Mersch can now look forward to scrutiny on his policy stance at the ECB rather than his gender, the pressure on Draghi is unlikely to dissipate, said Carsten Brzeski, a former European Commission official, who at ING Group in Brussels.

The gender issue “is not going to go away and is a nettle the ECB and the national central banks will have to grasp eventually,” he said. “Quite frankly, it looks a bit odd in this day and age to have an all-male board at one of the most important institutions in Europe.”

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