Weidmann Is Top Dog Again in ECB Race After Shifting Policy View

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Germany’s Jens Weidmann has forged ahead in the race to lead the European Central Bank after he unexpectedly backed President Mario Draghi’s crisis-fighting program.

On the eve of a meeting of European Union leaders to discuss the bloc’s top policy positions, Bloomberg’s poll of economists shows the Bundesbank president edging out his French rival Francois Villeroy de Galhau. Finnish central-banking veteran Erkki Liikanen tied with Villeroy for second place. Current Finnish Governor Olli Rehn took fourth, overtaking France’s Benoit Coeure.

Germany has never had an ECB president, and Weidmann tried to dispel the controversy over his opposition to unconventional measures by saying this month that the bond-buying program underpinning Draghi’s “whatever it takes” pledge to save the euro is legal and valid.

Time is running out for European leaders to decide who will succeed Draghi before his eight-year term ends in October. It’s only one of the several top positions that governments need to settle. They’re in Brussels this weekend to try to break the impasse.

Here are the most-likely nominees, based on a Bloomberg survey of economists (methodology below).

Jens Weidmann

Francophile Hawk
The German became the Bundesbank’s youngest-ever president in 2011 after his predecessor resigned to protest ECB bond purchases. Now 51, he’s mostly taken a hard line against loose monetary policy, earning him respect at home but criticism from Draghi for his perceived “nein zu allem”—no to everything—attitude. Despite now endorsing Draghi’s “Outright Monteary Transactions” program, other nations may still fear he’ll be too hasty in shutting off the money taps. After studying in Germany and France, Weidmann worked at the International Monetary Fund and took a break from the Bundesbank from 2006 to 2011 to work as an adviser to German Chancellor Angela Merkel.

Francois Villeroy de Galhau

German-Speaking Banker
Villeroy de Galhau lost his pole position in the race as France’s priorities appear to focus on securing the European Commission presidency. Since taking over as the Bank of France governor in 2015, he has stuck close to Draghi’s line backing continued stimulus. Yet he’s also a former banker with BNP Paribas SA, making him keenly aware of lenders’ concerns over the ECB’s negative interest rates. It probably won’t be much comfort to Germans, but he also has links with his neighboring country. The 60-year-old scion of the Villeroy & Boch ceramics family hails from the border region of Alsace, and loves to address German audiences in their native tongue. French-speaking Weidmann reciprocates.

Erkki Liikanen

EU Veteran
The 68-year-old stepped down from his post as Finland’s central-bank governor in July last year, and would bring decades of Brussels experience to the top of the ECB as governments try to solve the single currency’s structural shortcomings. In 2012, at the height of the debt crisis, he chaired a group of experts that outlined a plan of reforms for the EU banking sector. It has been only partially implemented. Liikanen was elected to Finland’s parliament when he was only 21, and since then has held posts including European commissioner, finance minister, ambassador in Brussels and general secretary of the SDP. While he said he won’t be campaigning for the job, “there may be situations where you get asked: ‘Will you do your duty?’ and then one must consider.” He’s a close confidante of Draghi and has supported extraordinary stimulus, he’s also considered moderate and pragmatic.

Olli Rehn

Finnish Eurocrat
Rehn, 57, may be one of the newer faces in European central banking, but he’s been involved in economic affairs for years. As EU commissioner in charge of the euro during the region’s debt crisis, he was a strong advocate of fiscal discipline before returning to Finnish politics in 2015 as economy minister and overseeing the country’s emergence from a three-year recession. He took over governorship of the Finnish central bank after Liikanen stepped down in mid-2018, and is one of the only Governing Council members who is an active Twitter user. His recent post that the ECB ``gotta do, what’s gotta do’’ suggests the football-loving Finn is ready to follow closely in Draghi’s footsteps.

Benoit Coeure

Markets Maestro
Coeure, 50, is already on the ECB’s Executive Board with a non-renewable eight-year term that runs until the end of 2019. He’s highly respected though, and it’s possible a way could be found to shift him to the presidency. He’s one of the architects behind quantitative easing and is responsible for markets, so he certainly has the necessary experience. Bonus point: he speaks Japanese. The Frenchman spent most of his career so far at his nation’s Treasury, where he rose to become deputy director general before moving to the euro area’s central bank in 2011. Like Villeroy, one strike against him might be that France has already had an ECB president with Jean-Claude Trichet

Klaus Regling

The Underwriter
One of the architects of the euro, Regling spent a decade at the German Finance Ministry where he helped prepare for economic and monetary union. In his current position leading the European Stability Mechanism, a backstop for countries in financial crisis, the 68-year-old has had close insight into the euro area’s existential woes. Regling has held various positions in the public and private sector in Europe, Asia and the U.S., including at the IMF and the European Commission.

Christine Lagarde

Trailblazing Globetrotter
Lagarde made her name breaking tradition in a world of predominantly male economic policy makers. As French finance minister from 2007-2011, she was the first woman to hold such a post in a Group of 8 country, and since then has been the first female head of the International Monetary Fund. Lagarde would also be the first woman to head the ECB and the first president without an economics degree. A trained lawyer, the 63-year-old would bring charisma and knack for quotes—she once said the Lehman Brothers crisis might not have happened if the bank had been Lehman Sisters.

Klaas Knot

Dutch Hope
The 52-year-old head of the Dutch central bank is typically on the same page as Weidmann on the topic of monetary stimulus, although his recent comments suggest he may be willing to stick with ultra-loose policy for a little longer. He was reappointed for seven years at the end of May. Counting against him politically is the fact that the Netherlands has already held the ECB presidency—Wim Duisenberg was in charge for the single currency’s first four years.

Ardo Hansson

Estonian Reformer
Chicago-born Hansson, 60, has been one of the most-consistent critics of quantitative easing, arguing against rushing into bond-purchases in 2015 and in favor of signaling an exit to the crisis-era tool three years later. A son of Estonian immigrants, with a PhD in Economics from Harvard, he was the World Bank’s lead economist for China and one of the architects of Estonia’s new currency after the collapse of the Soviet Union. His appointment would be a strong signal of recognition for the reform efforts made by the Baltic republics in joining the single currency. But it seems an unlikely scenario. His term at the central bank ended in June, and he says he’s not interested in moving to Frankfurt to work for the ECB.

Pablo Hernandez de Cos

Spanish Technocrat
The Madrid-born economist, 48, is the youngest among the contenders for Draghi’s job, though he has no shortage of experience. De Cos joined the Bank of Spain’s research department in 1997, and completed his PhD from the Complutense University in 2004. His thesis was supervised by former ECB Executive Board member Jose Manuel Gonzalez-Paramo, who he followed to the Frankfurt-based institution as an adviser. His appointment as governor was one of the last decisions made by Mariano Rajoy’s government before it was ousted in 2018. Choosing de Cos would likely have ripple effects: With Vice President Luis de Guindos, Spain already has a seat on the Executive Board that it would be pressured to give up.

Claudia Buch

In The Room
As Bundesbank vice president, Claudia Buch is frequently in the room when the ECB’s Governing Council meets. Prior to joining the central bank in 2014, the 53-year old was a member of the German government’s panel of economic advisers, becoming only the second woman to have taken on such a role since the group’s inception. She has been critical of ECB bond purchases, but her credentials and gender could be attractive for European Union governments if they decide to care about a lack of women in top roles.