MNI: New Dutch CB Chief Seen As Moderate Hawk

The Dutch National Bank's next President Olaf Sleijpen is seen as a continuity candidate likely to maintain the moderately hawkish line of the outgoing Klaas Knot, for whom he has for years acted as alternate at European Central Bank Governing Council meetings, officials who know him told MNI. 

His appointment was viewed as predictable after potentially more controversial candidates, including former Finance Minister and Eurogroup Chair Jeroen Dijsselbloem, had been ruled out by centre-right Finance Minister Elco Heinen, officials said.

Sleijpen, who also served as DNB Executive Board Member for Monetary Affairs, will take over from Knot at the start of July, at a time when securing a consensus on further rate cuts is likely to get tougher, with the deposit rate now at 2% and already within the range of estimates of neutral. 

“I don't think his views will differ much from Klaas's and he has never given indications in discussions that he is anything other than a centrist,” an official at another Eurosystem national bank said. “Anyone who still looks on the German/Dutch axis as being excessively hawkish obviously hasn't been watching the voting patterns in recent years -- both have shifted into an at worst, pragmatic position.”

NARROWING HAWK-DOVE DIVIDE

Insiders are anticipating a pause in the easing cycle in July, as the Governing Council awaits data to be available by its September meeting, as well as more clarity over global trade negotiations. (See MNI SOURCES: ECB Eyes July Pause, Tariffs Key To Cut Timing)

One former Eurosystem senior official said the ECB’s hawk-dove divide has narrowed thanks to the more collegiate leadership style of President Christine Lagarde. 

"With Christine Lagarde, there are fewer extremes, the hawkish-dovish stance is smaller, I think. For the time being, I don't see much of a fundamental divergence of views. It could of course change if oil prices increase further,” the official said.