Spain today named Economy Minister Luis de Guindos as a candidate for the coveted vice-presidency of the European Central Bank, pitching him against Central Bank Governor Philip Lane.
The race to be the ECB's number two kicks off two years of change within the bank's executive board.
The board consists of four board members, the vice president and president and it will set the tone for the fight for the ECB's top job.
Today is the deadline for candidates and only Professor Lane and de Guindos have applied so far to replace Portugal's Vitor Constancio whose eight-year term ends May 31.
Markets are watching to see who will replace him as the bank, which controls monetary policy for the 19-country euro zone, prepares to replace Italy's Mario Draghi at the helm next year.
The Working Group (EWG) of deputy finance ministers and treasurers who prepare Eurogroup meetings will meet on Thursday to discuss who to back for the position.
Euro zone finance ministers will vote on February 19 for the ECB candidate, ahead of a European Parliament hearing and final appointment by EU leaders.
De Guindos may face some opposition due to his close alignment with hardline German positions throughout the European economic crisis and concerns his election could clear the path to Draghi being replaced by a northern European in 2019.
Philip Lane's selection would be first time Ireland was represented on the ECB board since the euro zone's inception in 1999.
Spain was represented in Frankfurt by Jose Manuel Gonzalez Paramo until he left in 2012.
De Guindos has been Spain's economy minister since the conservative People's Party (PP), headed by Prime Minister Mariano Rajoy, won the 2011 election and has helped steer the country though its worst economic crisis in decades.
Before taking the helm at the Economy Ministry, he worked as a head of the financial sector in PricewaterhouseCoopers in Madrid and as head of Nomura Securities and Lehman Brothers in the Iberian peninsular before that.
Under him as economy minister, European authorities orchestrated a rescue of Spain's then sixth-biggest lender, Banco Popular, in early June 2017, the first time a bank in the euro zone was wound down according to the new resolution framework.
The ECB became the single supervisor for around 120 banks in the euro zone in November of 2014.
At a time when the ECB is working on a draft of new measures targeting soured loans on bank balance sheets, de Guindos can be credited for helping Spain's financial sector reduce its non-performing loans to around 8%.
Professor Lane has acted as an academic consultant for the European Commission, International Monetary Fund, World Bank and a number of central banks, including the ECB.
The European Parliament is also calling for governments to propose a female candidate and Spain's Socialists called yesteday for Rajoy to propose a female technocrat.
There is one woman on the six-member board and two on the ECB's 25-member governing council.
Government will make the case for Lane's appointment
Minister for Finance Paschal Donohoe said the Government would make the case for Governor Lane's appointment to other member states, focusing on his suitability for the role.
"[I will be] pointing to his track record as a central banker both for Ireland, and what he has achieved within the European Central Bank," he said.
Speaking at an Ibec event today, Mr Donohoe said it was to be expected that other countries might put forward their own candidate for the post but, now that nominations had closed, the focus would move to choosing the right person.
"Philip is an excellent candidate and I believe he will do a superb role within the European Central Bank. We will be continuing with our efforts to put forward his qualities to all member states who will have a vote in relation to it," the Minister said.
