U.S. Markets

ECB's Coeure praises 'outstanding' Lane in race for top jobs

Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - European Central Bank board member Benoit Coeure praised Ireland’s candidate to become the ECB’s next vice-president on Wednesday, describing Philip Lane as an “outstanding economist” and a “good colleague”.

The appointment is being closely watched by investors because it could end up influencing the race to replace ECB President Mario Draghi in 2019.

Lane has only just joined the race to succeed Vitor Constancio as the ECB’s second-in-command when he steps down in May. He may win the backing of France and some southern European countries over Spanish Economy Minister Luis de Guindos, long considered the favorite.

Coeure, a Frenchman, praised Lane but said the central bank had little say in the selection process, which is led by euro zone governments.

“Governor Lane, he’s an outstanding economist. He’s a good colleague on the Governing Council of the ECB,” Coeure told Ireland’s RTÉ TV.

“Now, as you know, the ECB has a very limited role in that process. We’ll give an opinion at a later stage and it’s really a political discussion, that’s all what I can say.”

France and other states may fear that the appointment of a Spaniard to the number two post would strengthen the chances of a northern European candidate, such as Bundesbank President Jens Weidmann, in the race to replace Draghi.

Some southern euro zone members may welcome Lane’s nomination because they feel de Guindos has aligned himself too closely with hardline German positions in recent years.

Euro zone finance ministers launched the process of choosing his replacement last week, kicking off two years of significant change on the six-member executive board of the ECB.

Reporting by Francesco Canepa; editing by Andrew Roche