Philip Lane gets the backing of MEPs in bid for ECB post

MEPs have backed the appointment of the governor of the Central Bank to the executive board of the European Central Bank (ECB).

Philip Lane was questioned on Tuesday in Brussels by the parliament's Economic and Monetary Affairs committee, which voted 33-6 in his favour. He gave a broad endorsement of the ECB's overall monetary strategy which, he said, "can cope" in the short and medium term with the challenges faced by the European economy. Continuity was the message, he said.

Mr Lane sidestepped questions about whether MEPs should have a veto on his appointment, part of an inter-institutional exercise in arm-wrestling.

‘Consulted’

Mr Lane, who takes over the job of the ECB’s chief economist in Frankfurt in June, was asked by several MEPs whether he would be prepared to forsake his appointment if the parliament did not approve it. The EU treaty provides that MEPs should be “consulted” for their opinion but do not have a veto. In this and other appointments, MEPs have tried to leverage extra power by applying pressure to candidates.

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Mr Lane made clear that he would not give up the job but denied forcefully that he was “indifferent” to their views. “That is very far from the case,” he said. “I hope to receive your approval.”

He insisted that he viewed the dialogue between the ECB and parliament as important. But the appointment process was one controlled by the European Council and the ECB, and “it is not for me, an applicant, to make the decision about that process”.

In the long term what is going to drive forward the economy is productivity, investment and education

Asked about whether he supported the ECB’s use of unconventional measures, such as monetary stimulation, he said that the measures had helped provide monetary stability . An exit strategy remained in a “search process”.

Fiscal responsibility

He said that the work in creating a backstop for the Single Resolution Fund, the strengthening of the European Stability Mechanism and the fiscal responsibility being manifested by member states all would make the euro zone better able to face a new downturn. He said he hoped the union would go on to create a deposit insurance scheme, a project currently deadlocked in the council.

On the control of interest rates, Mr Lane said that “in the long term what is going to drive forward the economy is productivity, investment and education . . . Monetary policy can disrupt that if bad, and, if good, can sustain those.”

He said that the demands of climate change required strong involvement of the ECB in planning financial strategy and supervision of credit risk assessment.

Speaking of his own experience in the Central Bank, Mr Lane said they had successfully promoted transparency and diversity in the bank and the firms it regulated. He hoped to bring such imperatives to the ECB.