ECB’s Makuch says he may consider leaving his post early

STARY SMOKOVEC, Slovakia (Reuters) – European Central Bank policymaker Jozef Makuch may consider stepping down as head of Slovakia’s central bank early to allow parliament to appoint a successor before what are expected to be highly divisive elections in spring 2020, he said.

That would avoid the prospect of political wranglings leading to his post being left vacant for an extended period, as has happened in Slovenia, which has been unable to pick a new governor since March.

Makuch, whose term ends in 2021, told reporters he considers finance minister Peter Kazimir as a suitable replacement.

“The next government will likely be made of several parties with a different world view,” Makuch said, addressing rumors in the Slovak press that he is preparing for an early departure. “That could lead to political instability and early elections.”

“Parliament may not be able to elect a candidate and there is a question whether it would not be better for the central bank to have a (new) governor before the elections… It would strengthen the independence of the bank,” Makuch said.

Opinion polls show that as many as eight parties could be elected to parliament in the 2020 vote, with the three-party centre-left governing coalition losing its majority and the opposition failing to gain a convincing upper hand.

Makuch said he has not made a final decision to leave and would have to discuss his status with the prime minister and the president.

“I have no say in who my successor would be,” Makuch said. “But in my opinion minister Kazimir would be a good governor.”

“His lack of experience in central banking is not a problem as Ecofin deals with all important monetary issues,” he added.

A lengthy vacancy would be a further blow to the ECB, one of Europe’s most powerful institutions, which has also been without a Latvian Governor for most of this year.

The ECB, which has revived the euro zone economy with a lengthy stimulus program, agreed last week to curb support even as risks to growth are on the rise.

Makuch said the decision was appropriate and the assessment that risks were broadly balanced was correct.

“We’re not underestimating the risks, we’re analyzing them,” he said. “Based on what we know now, the development is stable, risks are balanced, with some downside risks to GDP growth.

“We don’t see any reason to spread gloomy mood or panic,” he said.

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