Hello and welcome to our live blog on the European Central Bank’s press conference. The central bank did what markets expected and kept rates on hold. But ECB president Mario Draghi might offer some clues on what’s to come from the central bank in the months ahead and investors will also be looking for any comments on whether the ECB might start publishing the minutes from its governing council meetings. Draghi is due to begin speaking at 13.30 UK time.
By Claire Jones and Lindsay Whipp
French daily La Tribune reports that President Nicolas Sarkozy is opposed to Axel Weber taking the helm of the ECB next year. Citing sources close to the president, the paper says Mr Sarkozy has never agreed to Mr Weber’s appointment with German chancellor Angela Merkel. To underline the point, the paper points out that Mr Sarkozy has only recently received Bank of Italy governor Mario Draghi, widely considered Mr Weber’s chief rival.
The appointment of an ECB president needs approval by the EU’s political leaders, so Mr Sarkozy’s views will carry some weight. But this might just be political horse-trading. Automated Trader reports rumours that Mr Sarkozy has pledged to support Mr Weber’s candidacy in reward for Ms Merkel’s co-operation on EU fiscal rules. Plus it might be politically unpalatable to have ‘Southerners’ holding both key positions at the ECB (the ECB VP, Vitor Constancio, is Portuguese). Read more
There is a lot going on behind the scenes in German banking circles to prepare for the publication of Europe-wide “stress test” results later this month. German banks were always the most opposed, for a mixture of principled reasons (they are a bit of a PR gimmick) and fears about what they would reveal.
But the exercise is not only a test for the banks themselves. It is also a challenge for Axel Weber, the Bundesbank president who is tipped as a possible successor to Jean-Claude Trichet, when the European Central Bank president’s non-renewable eight year term expires in November next year. Read more
The European Central Bank has started a two-stage overhaul of its top leadership after the formal nomination of Portugal’s Vitor Constâncio as its next vice-president.
Eurozone finance ministers’ endorsement late on Monday of Portugal’s central bank governor for the number two slot at the central bank, guardian of the euro, set the stage for a decision next year on a successor for its president, Jean-Claude Trichet. Read more
Portuguese central banker Vitor Manuel Ribeiro Constancio has been chosen by a “unanimous” and “quick” vote of finance ministers from the 16 eurozone countries. Mr Constancio will replace Lucas Papademos when his eight-year term ends on May 31. Luxembourg’s Yves Mersch and Belgium’s Peter Praet had also been on the ballot for the vice presidency.
Mr Constancio’s reputation as a “dove”, who pays more attention to economic growth than some of his ECB colleagues, increases the likelihood that Axel Weber, an anti-inflation “hawk”, will be chosen to replace ECB President Jean-Claude Trichet when his term ends on October 31, 2011. Had ministers picked Mr Mersch, a tough inflation fighter, the chances of Italy’s Mario Draghi replacing Mr Trichet would have risen (from Bloomberg) Read more