Luxembourg’s former finance minister Pierre Gramegna is likely to take over the euro zone’s bailout fund, the European Stability Mechanism (ESM), succeeding Germany’s Klaus Regling who retired last month, a senior euro zone official said.
The ESM was created in 2012, during the euro zone’s sovereign debt crisis, to lend to euro zone governments cut off from markets. It has a 500 billion euro ($520 billion) war chest and can also lend to recapitalise banks and provide precautionary credit.
The official said Gramegna was the only candidate in the latest round of choosing Regling’s successor, after several earlier attempts did not bring the required majority support for any of the three candidates at the time, including Gramegna.
Italy and France, who earlier either opposed or did not support the Luxembourger, had changed their views, the official said.
Germany has supported Gramegna from the start, convinced he would be a strong signal to capital markets because of his reputation of being prudent with financial policy.
The formal vote on Gramegna’s candidacy is to take place later on Friday.