The European Central Bank (ECB) gained two new members on Jan. 1, and which of them will accede to the position of chief economist, vacated by Juergen Stark in 2011, remains to be seen.
Bloomberg reported that, although the six board member terms at the ECB customarily run for eight years, the two new members will be the third and fourth to take their seats in the past seven months. A fifth will rotate in May when Jose Manuel Gonzalez-Paramo of Spain completes his term.
As reported by AdvisorOne, Juergen Stark of Germany, who resigned in protest in 2011 when the ECB began purchasing Italian and Spanish bonds to try to contain the euro zone debt crisis, was the ECB’s chief economist. While his seat is being filled by Joerg Asmussen, Germany’s former deputy finance minister, Asmussen is not a shoo-in for the post his predecessor held.
He will be challenged for the chief economist spot by Benoit Coeure, former second in command at the French Treasury, as reported by AdvisorOne.com. Coeure will fill the seat left vacant by Italian Lorenzo Bini Smaghi, who was compelled to step down in exchange for France’s approval of Mario Draghi as president of the ECB, succeeding Jean-Claude Trichet.
Bini Smaghi had to be pushed into resigning; he had been determined to keep his seat, while both Italy and France exerted pressure to make him depart. Despite the fact that ECB statutes prohibit political interference, it is customary for the four largest euro area economies to sustain representation on the board.
When Bini Smaghi resisted, insisting that he would serve till the expiration of his term in 2013, France resorted to calling upon then-Prime Minister Silvio Berlusconi to honor his commitment to get Draghi to vacate in favor of a French representative. Berlusconi’s response was, “What should I do, should I kill him?” Eventually, however, Bini Smaghi announced in November that he would resign to take a post with Harvard University’s Center for International Affairs.