German government split over top job at EU lender

Receive free European Investment Bank updates

We’ll send you a myFT Daily Digest email rounding up the latest European Investment Bank news every morning.

Germany’s ruling coalition is split over who to support in the race for the leadership of the bloc’s biggest lender, as EU finance ministers discussed the issue on Saturday.

Chancellor Olaf Scholz backs Spain’s economy minister Nadia Calviño as the next president of the European Investment Bank, but the German ministers of finance and economy support her Danish rival, Margrethe Vestager, according to people familiar with the matter.

The EIB post, which oversees the world’s biggest multilateral financial institution with a balance sheet of more than half a trillion euros, will be vacated on December 31 when Werner Hoyer steps down after two six-year terms. The position is one of the most prominent of the EU’s top jobs, which are heavily contested among member states and often decided by high-level political horse-trading.

The finance ministers, who held their EIB discussion over breakfast in the Spanish city of Santiago de Compostela, did not formally discuss names, but instead gave clues about who they support by making suggestions regarding the bank’s strategy.

“The corridors were filled with the candidates meeting other ministers all weekend,” said a person involved in the meetings.

Scholz has worked closely with Calviño over the past five years and they both hail from centre-left parties. He wants Germany to support her, but Robert Habeck, deputy chancellor and leader of the German Greens, and Christian Lindner, finance minister and head of the liberal Free Democrats, are more inclined to back former European competition commissioner Vestager, a Danish liberal, said people briefed on the discussions.

Vestager was in Berlin last week to meet Lindner, Habeck and Wolfgang Schmidt, Scholz’s chief of staff. The trip was part of a tour of European capitals aimed at boosting her standing in the EIB contest.

Scholz’s backing for Calviño has helped swing some smaller member states to offer her their support, EU officials said, stressing that there was no guarantee that she would remain the favourite. Germany is one of the EIB’s three biggest shareholders alongside France and Italy.

As competition commissioner, Vestager angered Berlin and Paris by blocking a €15bn railway deal between France’s Alstom and Germany’s Siemens in 2019. Paris has not declared who it will support in the EIB race but officials said Paris is favourable towards Calviño.

Calviño’s candidacy got a fresh boost this week when Spain’s candidate to become chair of the Single Supervisory Mechanism, the eurozone’s top financial supervisor, lost out to Germany’s Claudia Buch, deputy head of the Bundesbank.

Similarly, a decision by eurozone ministers on Friday to support Italy’s Piero Cipollone to become a member of the European Central Bank’s executive board is seen as weakening the case of Rome’s EIB candidate, former finance minister Daniele Franco.

Spain holds the rotating presidency of the EU, meaning that Calviño was the chair of the two-day meeting. She recused herself from the breakfast debate, officials familiar with the planning said, which was instead overseen by Belgium’s finance minister.

The finance ministers, who are also the governors of the EIB, were not expected to reach a consensus decision on Calviño, Vestager or Franco on Saturday, not least due to the lack of clarity from many capitals as to whom they will ultimately support.

Speaking on the eve of the meeting, Lindner said the German government had not reached a decision on who to support. But he said ministers had a “clear picture” of their vision for the bank.

Berlin wanted to ensure the EIB maintained its triple A rating, saying “sound banking is essential for us”, and backed its efforts to finance green investments, projects in Africa and the reconstruction of Ukraine. But he stressed its mission “mustn’t be overstretched”.

He also said the bank’s governance could be improved, adding it needed to be more “agile in its processes”.

Calviño travelled to the G20 leaders’ summit in India last weekend to press her case to other EU delegates. She said on Friday that it would not be appropriate for her to use the Santiago meeting to promote her bid given she was hosting her colleagues in the city, including a private tour of the city’s famous cathedral and a lavish gala dinner.

“I do not intend to discuss with finance ministers present here . . . the ongoing competition and the different candidatures for the European Investment Bank,” she told reporters on Friday.

That echoed a demand made privately by Denmark in the lead-up to the meeting, officials said. Vestager and Franco are also attending the meetings in Spain to press their case to ministers.

The ministers will next meet in October, when a decision is possible.