ECB appoints Belgian as chief economist

Peter Praet to take over from Jürgen Stark.

The Belgian economist Peter Praet has been given the influential economics portfolio on the executive board of the European Central Bank, breaking with a tradition that has seen a German in the role since the ECB’s creation.

Praet, who has been on the ECB’s board since June 2011, takes over from Jürgen Stark, who resigned last year in opposition to the ECB’s expanded sovereign bond purchasing programme.

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Praet, a former executive director of the National Bank of Belgium and chief of staff to Belgium’s finance minister in 1999-2000, was not widely tipped for the chief economist role, which was announced on Tuesday (3 January).

Asmussen and Cœuré

His appointment is seen as a compromise, with Mario Draghi, the ECB’s president, deciding against two leading candidates – Jörg Asmussen, a German, and Benoît Cœuré, a Frenchman.

The ECB announced that Asmussen would be responsible for international relations. He will represent the ECB at international meetings and at the Eurogroup Working Group, and so will be heavily involved in decisions affecting the eurozone crisis.

Cœuré will be responsible, as of 1 March 2012, for market operations, taking over from José Manuel González-Páramo, a Spaniard, who remains on the board in charge of research, statistics and risk management. When Cœuré appeared before the European Parliament on 12 December, he suggested that the ECB’s bond-buying programme could be expanded further.

The moves represent the first changes to the ECB’s executive board since Draghi replaced Jean-Claude Trichet as president on 1 November 2011. In addition to Stark’s resignation, the changes were prompted by the departure from the board of Lorenzo Bini Smaghi, who stepped down when the French government became unhappy that Draghi’s appointment meant that there were two Italians and no French nationals on the board.

Vítor Constâncio, who is Portuguese, remains as vice-president.