Germany Pushing for ECB Presidency

June 26, 2017 Share Print 0

Missing in much of the talk about French President Emmanuel Macron’s grand vision to remake the eurozone is the simple, yet fundamental, question of what Berlin would demand in return.

Those infatuated with Macron’s ideas for a eurozone finance minister equipped with a budget are confident that at least some of his blueprint will become reality after German elections in September.

But German Chancellor Angela Merkel’s opening ask looks to be a big one: control of the European Central Bank.

Merkel, who is likely to be reelected chancellor, has offered a vague endorsement of Macron’s initiative but has yet to publicly spell out her terms. Behind the scenes, however, the haggling is well underway, and the ECB job is at the top of Berlin’s wish list.

Whatever shape a eurozone budget might take, Germany will be the main source of funding for the simple reason that it’s the country that can most afford to do so in the single-currency bloc.

That dynamic gives Berlin broad power to make demands.

Germany’s position will be even stronger if it agrees to a eurozone finance minister under French control. France’s European commissioner, Pierre Moscovici, is already lobbying for the role.

via Politico

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.