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ECONOMY

Spain’s De Guindos in line for ECB job after Irish candidate withdraws

Irish central bank chief Philip Lane pulled out of the race for the vice-presidency of the European Central Bank on Monday, leaving favourite Spanish Economy Minister Luis De Guindos the only candidate.

Spain's De Guindos in line for ECB job after Irish candidate withdraws
Photo: AFP

Eurozone finance ministers were widely expected to pick their Spanish peer for the top job, the first of a series of changes at the ECB over the coming two years, including the post of the chief of the bank currently held by Italian Mario Draghi.

“I will be withdrawing Philip's name and I have spoken to Minister De Guindos and wished him the best of luck this evening,” Irish Finance Minister Paschal Donohoe said as he arrived for talks to fill the post with his
eurozone counterparts.   

The ministers “will make a decision tonight that will be in the best interest of the functioning and success of the European Central Bank,” he added.

The choice comes despite the scepticism of senior European lawmakers who said they preferred Lane, who is not a politician, over his rival after an informal hearing last week.

MEPs raise concerns over de Guindos as ECB candidate

EU leaders will ultimately choose the successor to Portugal's Vitor Constancio, whose eight-year mandate expires in May, as the ECB's number two.   

That decision will be taken on March 22 at an EU summit after consultations with the European Parliament and the ECB's Governing Council.   

De Guindos, a veteran of eurozone economic policy, said this month he was “convinced” he will have enough support to clinch the post after Madrid officially nominated him for the job.

De Guindos defended his candidacy, saying he was the longest-serving member of the Eurogroup, which groups eurozone finance ministers.   

He has served as economy minister since Prime Minister Mariano Rajoy's conservative government came to power in 2011.   

As economy minister he oversaw the clean-up of Spain's banking industry that collapsed after a housing boom imploded during the worst of the eurozone debt crisis.

In exchange Spain had to impose tough austerity measures to reduce the county's public deficit.

Before entering the government, De Guindos led the Iberian unit of Lehman Brothers between 2006 and 2008 before the investment bank collapsed.

ECONOMY

Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Sweden's new right-wing govt slashes development aid

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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