Wednesday, May 22, 2024

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Dombrovskis is considering his odds in the ongoing EIB competition.


EU member states are currently in disagreement about who should assume the role of President of the European Investment Bank starting next year. This has led some unexpected candidates, such as European Commission Executive Vice President Valdis Dombrovskis, to consider making last-minute bids.

According to individuals familiar with the discussions, a potential alternative candidate may be proposed in the event of a deadlock, as none of the five applicants received sufficient support from EU finance ministers during last weekend’s meeting. The decision has been postponed.

Although Spain’s Finance Minister Nadia Calviño and Denmark’s Margrethe Vestager are still the top candidates, Dombrovskis has not dismissed the possibility of joining the race for the position if a definite decision is not made.

He has shown interest in staying in Brussels after the European election in June, but may encounter opposition at home from Krišjānis Kariņš, the former prime minister of Latvia, if he chooses to serve a third term in the EU executive.

According to sources familiar with the discussions, if the EIB race remains unresolved and Dombrovskis believes he has a stronger likelihood of securing a top EU position as the future EIB chief, he may be convinced to enter the race. However, his office has chosen not to make a statement at this time.

Such a move would be opposed by capitals who have made clear to Belgium, which is leading the process, that the choice should fall on one of the five existing contenders.

Getting stuck

The selected individual to succeed President Werner Hoyer, who will be leaving at the end of the year, must garner backing from the EIB’s major shareholders – France, Germany, and Italy – who each possess approximately 16% of the bank’s capital. Additionally, they must avoid being obstructed by a minority of nine countries.

According to two sources who were present, while Vestager was in Paris this week, Finance Minister Bruno Le Maire expressed a willingness to back her. However, this is not yet confirmed and is contingent on Germany’s decision. Their coalition still needs to determine their stance, and there is concern that they may choose different candidates, resulting in a deadlock.

Italy has its own candidate, former Finance Minister Daniele Franco, as do Poland and Sweden, but they are considered outsiders.

The primary worry among diplomats and officials is the possibility of the race becoming “stalled,” as influential shareholders support one candidate while a majority of countries choose another.

Calviño, who is considered the top contender, joined the competition after the June 16 cutoff, possibly influenced by promises of support. However, only Portugal has openly endorsed her candidacy at this time.

Nadia Calviño is widely considered to be the leading candidate | Image credit: Miguel Riopa/AFP via Getty Images

The appointment of German economist Claudia Buch over Spain’s Margarita Delgado to a separate position — leading the supervisory arm of the European Central Bank — has cleared an obstacle to Calviño’s path to the top but Buch needs to be confirmed in a plenary vote in the European Parliament, which is not yet scheduled.

In the meantime, Vestager has been trying to gain support from the eastern region, expressing in an interview with POLITICO that “currently, it is important to heavily invest in Eastern Europe.”

Open race

It appears to be functioning properly. Based on discussions with anonymous officials, as their governments have not yet officially endorsed a candidate, the majority of countries in Central and Eastern Europe either back Vestager or Poland’s candidate and EIB vice president, Teresa Czerwińska. Even countries in the south, such as Greece and Bulgaria, support the Danish politician.

Although it may not be sufficient to create a blocking minority against Calviño, there is potential for some individuals to be influenced and alter their vote. This indicates that the race is still ongoing.

To pass, a candidate must receive support from 18 nations, which make up 68% of the bank’s share capital. This requirement of dual majority is posing challenges for potential candidates.

Belgium, which has the rotating chair of the EIB, is scoping out support among capitals without a specific deadline. “We do not have to force the process,” Finance Minister Vincent Van Peteghem said on the margins of the finance ministers’ meeting in Santiago de Compostela, Spain.

The caliber of candidates and the tight competition has underscored how the role of the bank, once a little-known institution sitting in Luxembourg, its presidency an afterthought, has been bolstered in recent years.

The EIB has emerged as a crucial source of funding for EU initiatives, ranging from addressing climate issues to rebuilding Ukraine. Its strength lies in its capacity to attract private investments through a combination of public guarantees. This is particularly valuable during times of limited government budgets and with the EU facing numerous challenges that strain its financial resources.

“Prominent and influential individuals have expressed interest in taking over my role. They are engaged in a fierce competition, and I am pleased to witness it. It is evident that we have successfully raised the profile of the bank from Luxembourg and gained recognition from political leaders,” stated Hoyer, outgoing President, to POLITICO during the U.N. General Assembly.

Reporting from New York, Suzanne Lynch made contributions.