Second coming of Sylvie Goulard

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PARIS — Emmanuel Macron has made a first and surprising move in the high-stakes game that will end with the near-total renewal at the top of all major EU institutions in the second half of 2019.

That’s the upshot of the French president’s rehabilitation of former (albeit briefly) Defense Minister Sylvie Goulard, unexpectedly selected as deputy governor of Banque de France, the French central bank.

It’s safe to assume that Goulard, 53, hasn’t been chosen for her expertise in the intricacies of monetary policy, quantitative easing and forward guidance.

And the outspoken former MEP is unlikely to find lasting professional happiness in her new job, usually a career-crowning position for French Treasury officials, most of whom tend to toil in obscurity during their six-year term.

Goulard had been out of a government job since she resigned as defense minister last June after just 34 days in the post. She did so, she said at the time, to better defend herself against allegations that one of her European Parliament aides had been working in fact for the French centrist party Modem.

But her profile, and the fact that she was an early and steadfast supporter of Macron, is now fuelling speculation that the Bank of France job is only a temporary assignment, and that she could land a higher-profile position in 2019, either as the French European commissioner or as a member of the ECB’s six-strong executive board.

Goulard was early to jump on the Macron train, seen often at the young candidate’s side. She pressed him to reach out to the German establishment and to run on an unapologetically pro-European campaign.

Even after her departure from the government, Goulard was a proxy for Macron at public gatherings in Paris and Brussels, never being shy about her closeness to the president.

Un-banky banker

Macron’s choice of his ally for the central bank job will lend credence to the view that the French president isn’t much interested in theoretical debates on economic or monetary policy, or in promoting or surrounding himself with academics in the field.

Contrary to the United States, where so far Federal Reserve presidents have always come from academia, France tends to promote finance ministry bureaucrats to the job. Goulard will be the first ever French politician to become a central banker.

But a former (non-French) ECB executive board member said Goulard will bring to the job “the vista and the global political outlook that is necessary in a good central banker.”

On top of this, the former board member added, “she is hard-working and has built up quite a strong competence on economic and financial matters” during her stint as an MEP from 2009 to 2017.

A fluent German speaker and an advocate of close Franco-German ties, Goulard has been critical of successive French governments, on the left and right, for the country’s permanent budget deficits and rising public debt.

Frankfurt or Brussels?

According to a French government insider, with Goulard’s Berlin-friendly profile, Macron may even harbor hopes of her making a credible candidate for the job of European Central Bank president when Mario Draghi steps down in October 2019.

“It’s a long shot, but you never know what could happen by then,” the official added, noting that Jens Weidmann, the president of the Bundesbank, remains for now the arch-favorite to get the job.

Weidmann could prove unpalatable for some eurozone members, who will point out that he has led the opposition to Draghi’s policies for too long.

As a fallback option, Goulard could also replace the current French member of the ECB’s executive board, Benoit Coeuré, whose own term expires in January 2020.

The first potential victim of her appointment is current Bank of France Governor François Villeroy de Galhau, an Hollande-era appointee who was said to be campaigning actively to succeed Draghi.

“He will have a deputy with a much-higher profile than him, a former minister and MEP, better connected to the president, better known abroad, and on top of this he gets the not-so-subliminal message that he shouldn’t harbor any hopes for the ECB’s top job,” noted an ECB insider.

Another scenario, which would be more in line with Goulard’s experience, would be for her to become the French appointee to the next European Commission to be appointed in the fall of 2019.

“But in this case, why would [Macron] make her a central banker? He probably could find other jobs for her if that was the only problem,” the French government official noted.

The one scenario that seems out of the question is for Goulard to lead a Macron-friendly or Macron-compatible centrist party list to the European Parliament election to take place in May 2019 eyeing the possible job of European Commission president.

“As a central banker and for now, she will have to pretend she doesn’t dwell in politics,” the French government aide said.

Original Article