German politics and ECB’s Vice-Presidency to take centre stage today – Rabobank

The negotiations between SPD and CDU/CSU leaders are continuing following a 24 hour marathon session yesterday, in addition to the deadline for nominations for the ECB’s Vice-Presidency and are going to be the key events for today’s session, according to analysts at Rabobank.

Key Quotes

“Chancellor Merkel referred to the recent turbulence in stock markets as a reason to get to an agreement in the interest of stability, but a final agreement is unlikely before midday according to party officials speaking to reporters. Much hinges on whether the SPD leadership will prove successful in obtaining sufficient concessions to be able to sell the deal to their grassroots – as they will have the final proof of the pudding.”

“Today is also the deadline for nominations for the ECB’s Vice-Presidency. To date, only two contenders have been flagged as potential replacements for Mr. Constancio. Ireland has put forward its president of the central bank, Philip Lane. Spain, meanwhile, is also keen to get back on the ECB’s Executive Board, and according to various newswires the country will officially announce its candidate today. The most mentioned name is that of Mr. De Guindos, who is currently Spain’s Minister of Economy and Competitiveness.”

“There is an off-chance that other governments may still join the race before today’s deadline, but we believe that they may prefer to tactically wait this one out and try to claim one of the Executive Board seats next year. It will then be up to the Eurogroup to appoint one of the candidates in the coming months. While we believe the impact of the Vice-President to be limited, it may affect the odds of different candidates for Mr. Draghi’s seat next year: a relatively dovish Vice-President will probably increase Northern-European calls for a more hawkish ECB President.”