BRUSSELS/MEXICO CITY Spain on Monday obstructed the appointment of Yves Mersch to the executive board of the European Central Bank saying it wasn't comfortable with the process being used and left open the possibility of nominating its own candidate for the job.
The move re-opened a seven-month battle and follows opposition from the European Parliament, which voted against Luxembourger Mersch because it wants more women in the European Union's higher echelons.
EU leaders can still push through the appointment, critical to tackling Europe's debt crisis, but will have to do so face-to-face at one of their upcoming summits before the end of the year, probably in December.
The European Council, which represents EU member states, had tried to secure Mersch's appointment via a "written procedure", a fast-track method that would have put an end to the battle to confirm the banker's candidacy.
But Spain said on Monday it was opposed to using such a procedure.
"What the Spanish government is doing is to take note of a decision of the European parliament that, even if not binding, is relevant and has strong political value," Economy Minister Luis de Guindos said at a news conference on the sidelines of the meeting of G20 finance ministers in Mexico City.
"There should be no doubt that Spain, logically, had a clear willingness that a Spanish candidate should be appointed."
Asked if Spain would now consider presenting an alternative female candidate to Mersch, he said: "I will not tell you either yes or no. Spain keeps all options and possibilities open."
Spanish officials had said earlier that there had been insufficient discussion of Mersch's candidacy among EU leaders and they wanted to ensure that a proper debate took place, hence their decision to block his fast-track approval.
The European Council said the issue would be discussed soon.
"The issue will be on the agenda of an upcoming meeting in the European Council with the objective of taking the formal decision," it said in a short statement.
EU leaders will meet in Brussels on November 22-23, when they are scheduled to discuss the next long-term EU budget, and again on December 13-14, when they will discuss economic issues.
If a unanimous decision on Mersch cannot be reached, then a weighted-voting system will be used, officials said. That will likely ensure Mersch is appointed since Spain, which is the only country to oppose Mersch, could not block his appointment alone.
Mersch, a conservative monetary policymaker whose candidacy is strongly backed by Germany, was nominated to the six-person executive board, the ECB's top decision-making forum, in July.
Leaving the position vacant for much longer could create management strains at the bank, which is playing a central role in trying to keep the euro zone stable through the crisis.
ECB President Mario Draghi told the European Parliament last month that he wanted Mersch's nomination approved.
Spain's move is a victory of sorts for the European Parliament, which has long opposed Mersch's appointment on gender grounds, saying not enough effort has been made to find a suitable woman for the high-profile post.
There are no questions about Mersch's qualification in terms of the job itself.
Mersch has kept silent during the confirmation process, even after the European Parliament came out against him last month in a non-binding vote, citing his gender only.
The parliament's frustration has been focused on the European Council, which it says has not done enough to come up with strong women for the post. The Council has said it is up to member states to put forward candidates, and if no women are proposed, there is little it can do about it.
If Spain were to nominate a female alternative to Mersch, Belen Romana Garcia, a former director-general of the treasury, is one name that has been mentioned.
"She ticks all the boxes," a Spanish government source told Reuters. Romana Garcia was the Spanish candidate to become the European Stability Mechanism head earlier this year.
Analysts have said that if Spain had nominated former finance minister Elena Salgado for the board when Jose Manuel Gonzalez Paramo stepped down in May, she would have been a shoo-in instead of Mersch.
But the Spanish government decided to go with the ECB's top lawyer, Antonio Sainz de Vicuna, whose nomination did not succeed, opening the way for Mersch to be appointed.
Gertrude Tumpel-Gugerell and Sirkka Hamalainen of Finland are the only two women to have occupied posts on the ECB's executive board since it was set up in 1998. There are currently no women at the top of the central bank.
(Editing by Luke Baker and Jeremy Gaunt, Ron Askew.)