The National Bank of Belgium has asked President Pierre Wunsch, whose term expired on Monday after the government was unable to agree on a reappointment to the European Central Bank’s rate-setting board, to remain in his post on an interim basis.
Political conflicts between Belgium’s main political parties have prevented the appointment of several senior civil servants in recent weeks.
Wansch, who also sits on the board of the Bank for International Settlements, is the highest-profile victim so far.
As an emergency measure, the central bank’s regent council decided to keep Mr. Wunsch in the post at the request of the government, which wants him to remain in office for another term.
The Council of Regents said it was relying on the principle of continuity of public service to continue Mr Wunsch’s role, calling it the “second best option”.
It is unclear whether the interim measures will be enough to allow Wunsch, who was among the first to warn of the onset of rapid inflation, to remain on the ECB’s Governing Council.
An ECB spokesperson declined to comment.
“The Council of Regents responded positively to the request of the Prime Minister and Minister of Finance and asked Mr. Wansch to continue as president on an interim basis until the government makes a formal decision on his reappointment,” the bank said.
Prime Minister Alexander de Croo and Finance Minister Vincent Van Peteghem responded to a request to the Regency Council, saying they intended to reappoint Wunsch and promising that the government would conclude its deliberations soon.
Wansch, who took office in early 2019, was the first of the ECB policymakers to predict a resurgence in inflation, and most other policymakers believed that the rapid rise in prices would be temporary and that accommodative monetary policy would be He called for monetary tightening, even though he insisted it remained appropriate.
History proved Wansch right, and the bank embarked on an unprecedented series of rate hikes in mid-2022, raising deposit rates to a record 4% after inflation peaked above 10%. .
The central bank is debating how long interest rates should remain this high and whether they could start cutting rates around mid-year as price pressures ease.