Spain unexpectedly bars the approval of Luxembourg banker Mersch to ECB

BRUSSELS – The European Union's member states failed on Monday to name Luxembourg's top banker to the executive board of the European Central Bank after Spain raised objections over his appointment.

The member states were expected to approve Yves Mersch joining the six-person board, overriding the advice of the European Parliament, which wants more women voted in. But officials said Spain unexpectedly voiced concerns on Mersch's nomination.

The issue will now be left for the EU leaders to discuss at their Nov. 22-23 summit, or a later one in December, extending a key vacancy at the ECB as the region's financial crisis continues unabated.

In an unprecedented move, the EU Parliament voted against Mersch's appointment last month to protest the lack of women among the ECB's top executives.

But member states seemed ready to vote Mersch in anyway, ignoring the legislature's advice and prompting protests from some EU lawmakers.

Spain said Monday that the issue merited a closer look by EU leaders at their summit.

"This question requires a discussion of the heads of government. And since we have such a meeting in a couple of days, it would be good to have this discussion there," said a Spanish official, who spoke only on condition of anonymity because of the sensitivity of the issue.

The official said Spain did not have a problem with Mersch in particular as a candidate.

Up to now, negotiations over ECB appointments have been dominated not by issues of gender equity but by the unwritten, ironclad rules of distributing top posts among member states. As the two biggest economies in the 17-country eurozone, Germany and France demand one spot each on the ECB board. Italy also typically gets one — in this case ECB President Mario Draghi.

Spain has also felt it should have a member on the executive board. At one time, it pushed its own candidate, Antonio Saenz de Vicuna, for the spot Mersch was due to fill.

Mersch is regarded as a hawk — a policymaker focused on fighting inflation, and therefore less likely to approve interest rate cuts or other means of loosening credit unless absolutely necessary.

European parliament backers of a better gender balance on the ECB applauded the move spurred by Spain.

Greens expert Sven Giegold said such an approval by member states "would have represented cynical political chicanery in the extreme."

When it rejected Mersch's nomination, the Parliament said the EU nations had not responded adequately to a request to come up with a plan to find more female candidates. Legislators also pointed out that appointing a man this time means the ECB's top body will continue without a woman member until 2018, when the next scheduled vacancy occurs.

A woman had always served on the executive council from the bank's founding in 1998 until last year. Sirkka Haemaelaeinen served until May 2003, when she was succeeded by Gertude Tumpel-Gugerell. Since Tumpel-Gugerell's eight year term expired in May, 2011, however, there has been no woman on the executive board or on the 23-seat governing council which sets interest rates.

The government council is made up of the executive board plus the heads of the 17 national central banks in the eurozone, all of whom are men.

Four of the six posts on the executive board have come open but been filled with men since Tumpell-Gugerell left.

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Dave McHugh contributed from Frankfurt.