Germany lost the ECB leadership position for the first time in 13 years
. European Central Bank (ECB) on Tuesday named today Belgian Peter Praet as institution’s chief economist. The decision that came as a surprise for Germany, is a compromise with France, according to Reuters. Praet, a member of the ECB board last year, replaces German Juergen Stark in the post of chief economist, key function in shaping Central European Bank’s monetary policy. The board consists of six members, including President of the ECB, Mario Draghi.
Peter Praet graduated from Université Libre de Bruxelles. He has a Bachelor of Arts degree in Economics, a Master’s degree in Economics (1972), and PhD in Economics (1980). He held positions at Fortis Bank (Chief Economist) and the National Bank of Belgium (Executive Director) from 2000 to 2011. The decision by Mario Draghi, the Italian Head of ECB to appoint Praet, aged 62, born in Germany, as chief economist indicates a compromise, according to Reuters. German Joerg Asmussen and Frenchman Benoit Coeure, which became members of the Board in January, were considered favorites in the race for this post as Germany and France competed for the ECB chief economist position.
The Chief Economist function was held so far only by Germany, by Stark and his predecessor, Otmar Issing. Asmussen does not have a substantial experience in the economic field compared to Praet or Coeure. The role of the chief economist will allow Praet to propose the decision that ECB should take regarding the monetary policy rate at periodic meetings. The proposals of chief economist form the basis of discussions for the 23 members of the Governing Council.Other responsibilities for Praet include ECB human resources and its budget.
Asmussen will deal with international relations in the Council of the ECB and will take over the portfolio of monetary operations, which includes supervising the controversial program of government bond purchases developed by the bank.
