Standoff between Finns who won’t flinch keeps both in ECB race

Finland is likely to keep pushing both of its candidates to succeed Mario Draghi as president of the European Central Bank -- as neither of them gives way to the other.
Photo: Karoliina Vuorenmäki
Photo: Karoliina Vuorenmäki

Government officials will probably promote the merits of former Finnish central bank Governor Erkki Liikanen, 68, and his successor Olli Rehn, 57, for now as horse-trading for the top posts of the European Union heats up, according to people with knowledge of the matter.

Their chances of getting the ECB job center on the scenario of an impasse between Germany and France that would see one of them stepping in as part of a compromise. Such an outcome would meet the unwritten criteria for a candidate from a northern European country to succeed the southern European who will have run the central bank for eight years.

What has prolonged the standoff between the two Finns is the creation of a new coalition government that includes both Liikanen’s Social Democrats and Rehn’s Center Party. That surprise outcome canceled a potential solution where a lack of political support could effectively have taken one out of the race.

At this stage in the ECB succession process, some names being floated might only be to test their acceptability. Finland won’t have to commit to a single candidate until it becomes clear which, if any, enjoys broad backing, two people said. That approach could save the country’s new cabinet, sworn in last week, from internal strife.

Liikanen served on the ECB Governing Council for 14 years as the Finnish governor and has been one of Draghi’s most trusted confidants. He would be the oldest-ever person in the job. This week, he won the endorsement of the Economist magazine for the role.

Rehn earned his credentials as an EU Commissioner during the region’s debt crisis, a role that might spark bitter memories in some countries. He would be the youngest-ever ECB president, and one whose central banking career is currently just over two years old.

Each has taken a different approach to the succession. Liikanen hinted last year that he was open to the role but insisted he wouldn’t campaign for it. By contrast, Rehn has repeatedly highlighted his candidacy by calling for the ECB to revisit assumptions underpinning its mandate.

EU leaders are currently tussling over a series of senior roles, including the helm of the central bank and the presidency of the European Commission. German Chancellor Angela Merkel is currently seeking either the Commission for her party ally Manfred Weber, or the ECB for Bundesbank President Jens Weidmann.

Finland isn’t the only country with more than one leading ECB contender. French President Emmanuel Macron has yet to choose a candidate between Bank of France Governor Francois Villeroy de Galhau, and ECB Executive Board member Benoit Coeure.

It’s possible that the leaders could push their decision on the next ECB president into July or later as they first focus on appointing the bloc’s top political positions.

Finnish ECB presidential candidate Rehn calls for more tools to mainstream green finance

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