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Dutchman gathers support to replace Mersch on ECB board

BRUSSELS/FRANKFURT (Reuters) - Dutchman Frank Elderson appeared on Monday to be the front runner for a seat on the European Central Bank’s executive board as central and eastern European countries, who also want the job, have so far not agreed on a single candidate, euro zone officials said.

FILE PHOTO: Yves Mersch, Member of the Executive Board of the European Central Bank delivers a speech during Lamfalussy Lectures Conference in Budapest, Hungary, February 4, 2019. REUTERS/Bernadett Szabo

Euro zone governments have until Sept. 25 to submit candidates to succeed Yves Mersch, whose term on the ECB’s executive board ends in December along with his mandate as the deputy chair of the ECB’s bank supervision arm.

The Netherlands proposed Elderson who has been an Executive Director of Supervision at the Dutch central bank since 2011 and whose professional credentials have already won him some support.

But central and eastern European countries want their own representative. Officials have mentioned former Slovenian central bank governor Botsjan Jazbec, now at the Single Resolution Board, which handles euro zone bank failures, and Estonian central bank head Ardo Hansson.

A third potential central European candidate is Peter Kazimir, Slovak central bank governor and former Slovak finance minister. None of them have made any public comments about the position.

“So far the central Europeans have not come up with a candidate, whereas the Dutch have,” said one euro zone official involved in the decision-making process. “It feels a bit like they are having trouble finding the right person.”

The six-person executive board of the ECB manages its day-to-day operations and members are appointed for eight-year terms that cannot be renewed.

“Kazimir is nice and was a good finance minister, but I think people would be reluctant to have a third former finance minister on the board after (ECB president Christine) Lagarde and (ECB vice president Luis) de Guindos. And the Dutch are already commanding quite some support,” the official said.

In a potential complication, officials said Lagarde has made clear she wants the candidate to be a woman, so that the six-person board could be equally divided between the genders.

An ECB spokesperson declined to comment.

Euro zone officials involved in making the choice noted that the competence of the candidate would come first, especially since the supervision portfolio required specialized expertise.

Other officials said that as the new board member will likely have to be vice chair of the ECB’s bank supervisory board, he or she would preferably have experience in overseeing the financial industry.

Even though it has set gender equality as a priority for years, Lagarde is one of just two women on the 25-member Governing Council. None of the 19 national central banks of euro zone countries has a female governor.

In October, ministers will choose one candidate with a simple majority of votes, where each euro zone country has one vote.

The candidate will then have a hearing in the European Parliament, which cannot block any candidacies, and be formally appointed by European Union leaders at their summit in December.

Reporting by Jan Strupczewski and Balazs Koranyi; Editing by Hugh Lawson

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