PARIS (Reuters) - France has nominated Treasury Chief Economist Benoit Coeure as a candidate for the executive board of the European Central Bank, to replace outgoing board member Lorenzo Bini Smaghi, the Finance Ministry said on Thursday.
Bini Smaghi resigned from his post on the ECB’s six-member executive board earlier this month after coming under heavy political pressure to step down and make way for a Frenchman.
France was left without a seat on the board when Jean-Claude Trichet stood down as ECB president last month and was replaced by another Italian, Mario Draghi.
Viewed as a pragmatist by colleagues, Coeure is also deputy head of the Treasury.
The author of numerous books on economics and fluent in English and Japanese, he has played a key role during France’s year-long presidency of the Group of 20 economic powers that ended this month.
“He has demonstrated the extent of his abilities and personal qualities, which he will use to the benefit of the ECB’s board if he is appointed,” the Finance Ministry said in a statement.
Coeure’s appointment to the board would bring a second monetary policy pragmatist to the executive board with Germany’s Deputy Finance Minister Joerg Asmussen replacing the more hawkish Juergen Stark on the board.
In the French tradition of central banking, Coeure is said to see monetary policy as subservient to the needs of the economy.
He is also believed to be open to more unconventional measures to keep the channels of monetary policy open.
After his nomination, it is up to France to propose Coeure candidacy to the Eurogroup of euro zone finance ministers, which could back him as soon as its next meeting on Tuesday.
If approved by them, the backing of EU finances ministers, the European Parliament and the ECB is likely to quickly follow before it is up to EU leaders to take a final decision.
Born in 1969, a former student of the prestigious Ecole Polytechnique and National School of Statistics and Economic Administration (ENSAE), Coeure is an expert on the European economy.
He also co-chaired the Paris Club of creditor nations and is a former head of France’s AFT debt management agency, giving him a close understanding of the dynamics of bond markets.
If confirmed, Coeure’s arrival on the ECB’s board would end a period of tension in which the central bank’s independence has been called into question due to pressure on Bini Smaghi to resign.
France has called on the ECB to help stop the euro zone’s debt crisis from spreading by playing the role of lender of last resort in the face of entrenched opposition from the bank itself and from Germany.
French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed earlier on Thursday to stop sniping in public about whether the ECB should do more to stop the crisis.
Moments before Coeure was nominated to the executive board, French Finance Minister Francois Baroin said that France, like Germany, placed great value on the ECB’s independence.
Additional reporting Jean-Baptiste Vey and Daniel Flynn; Editing by John Stonestreet and Maureen Bavdek