Guindos Says EU Broke Gentleman’s Pact by Denying Spain ECB Seat

  • Spain economy minister says nation aims to regain influence
  • Next ECB board vacancy due in 2018 when Constancio leaves

Spanish Economy Minister Luis de Guindos said his European peers broke with informal practice when his nation lost its seat on the European Central Bank’s executive board four years ago.

The Spanish candidate, Antonio Sainz de Vicuna, lost out to Luxembourg’s Yves Mersch in 2012 when Spain’s previous representative on the board, Jose Manuel Gonzalez-Paramo, stepped down at the end of his term.

“They told me Spain would not have a representative on the ECB, that’s the reality,” De Guindos told reporters in Madrid on Tuesday. “A decision was taken, Germany favored the Luxembourg candidate, and that broke a gentleman’s agreement.”

While the ECB’s six executive board members, including President Mario Draghi, are formally present in their personal capacity as policy makers, in practice horse-trading among the euro’s member states has always dominated the choice of who gets a seat on the influential panel. Spain, with the region’s fourth-largest economy, lost its voice there just as it was experiencing its worst financial crisis in modern history.

Now, after two elections and a 10-month political impasse that ended in late October, Spain is trying to regain influence at top European institutions. De Guindos himself may make a bid to lead the Eurogroup, a gathering of euro-area finance ministers, Expansion reported in November. The next position on the ECB’s six-person executive board due to become vacant is that currently held by Portugal’s Vitor Constancio, the vice president, in 2018.

“This government will try to be influential in all debates,” De Guindos said. “Spain is out of the political-uncertainty spotlight.”

It’s an open question as to whether that would pave the way for Spain to regain a spot on the top panel, or whether that seat would be directly replaced by a representative from another smaller euro nation, as informal tradition would suggest. The ECB’s executive board is appointed by the European Council by qualified majority.

The Bank of Spain is currently led by Luis Maria Linde, who was criticized last year for describing the austerity measures imposed by Prime Minister Mariano Rajoy as an act of patriotism. Linde’s deputy, Fernando Restoy, is set to leave the institution in early January to take up a role at the Bank for International Settlements.

— With assistance by Ben Sills

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