French President Emmanuel Macron must make the most important choice on the composition of the European Central Bank's policymakers in years: whether to reappoint the Bank of France governor.
Francois Villeroy de Galhau's six-year term expires at the end of October, and the president might decide as soon as this week whether he should be re-elected. Alternatively, Macron, who has already transformed the ECB by successfully lobbying for the appointment of the first female president, Christine Lagarde, may choose to overhaul it even more.
With Villeroy, 62, holding the seat at the Governing Council reserved for the eurozone's second-largest economy, the choice on his future is likely the most important before 2026, when states must choose a successor to Vice President Luis de Guindos.
“The default option and the path of least resistance would be to have Villeroy for the second term,” said Frederik Ducrozet, an economist at Banque Pictet & Cie in Geneva who, as a student, attended classes taught by Villeroy at Sciences Po in Paris. “That was the case in the past, if you didn’t make any obvious mistakes.”
The Bank of France and Macron’s office declined to comment on the potential reappointment.
Villeroy, a former BNP Paribas SA chief operations officer, was chosen by Francois Hollande, the French president Macron served under before declining to compete for re-election in 2017.
Rather than re-appointing a male bureaucratic veteran who is also the scion of a porcelain manufacturing dynasty, Macron may choose a woman, such as OECD Chief Economist Laurence Boone, who succeeded him as Hollande's economic adviser. She would then be the sole female national governor in the eurozone's 19 member countries.
France has no shortage of eminent economists, including Benoit Coeure, a former ECB Executive Board member who currently heads the Bank for International Settlements' innovation hub. Macron has appointed him to conduct an assessment of the government's fiscal stimulus.
Villeroy, a German speaker from Strasbourg, has carved out a distinct voice for France at the ECB, one he claims is rooted in pragmatism rather than a hawkish or dovish camp.