By Todd Buell 

BRUSSELS -- Spain's finance minister looks set to secure the No. 2 position at the European Central Bank after his only rival for the post withdrew, opening the door for something many Germans have long wanted: one of their countrymen leading the ECB.

Luis de Guindos was Monday expected to be nominated by eurozone finance ministers as the next ECB vice president after Ireland withdrew its nomination of Philip Lane, the governor of the Irish central bank.

That in turn could make room for a German to replace Mario Draghi as president of the ECB given the fact that a German has yet to head the Frankfurt-based institution, and appointing a representative from Northern Europe to the top post could be viewed as a counterbalance to Mr. de Guindos being from Southern Europe.

Mr. de Guindos's appointment would mark the first step in a lengthy process to select the next slate of top ECB officials. Those appointed will likely choose the pace at which eurozone interest rates rise again, after falling to historic lows in a bid to combat fears of deflation. The selection process is as much based on national political positioning as on policy competence.

The Spanish politician was widely seen as the front-runner for the No. 2 role, "given the unwritten rule that the four largest eurozone countries should be represented in the ECB's executive board," said Frankfurt-based ING economist Carsten Brzeski in a note last week.

However, Mr. de Guindos's experience as a politician irritates some central bankers who fear he isn't qualified.

"It is too late for on-the-job training when you join the ECB executive board. This is a person who has no central bank experience at all," said Stefan Gerlach, a former deputy governor of Ireland's central bank and now chief economist at EFG Bank in Zurich.

In recent years Germans have watched uncomfortably as Mr. Draghi, an Italian, pushed through policies, such as buying government bonds and negative interest rates, that run counter to Germany's penchant for saving and fear of inflation. Germany also has yet to have one of its nationals atop the ECB. Mr. Draghi's predecessors were Frenchman Jean-Claude Trichet and a Dutchman, the late Wim Duisenberg. Now, many in Germany say it's Berlin's turn.

"A [Jens] Weidmann presidency currently looks like the scenario with the highest probability at the bookies," said Mr. Brzeski, referring to the head of Germany's central bank.

However, betters might be in for a surprise. It is far from certain that Mr. Weidmann will ultimately succeed Mr. Draghi when his term ends in October 2019. Mr. Weidmann's criticism of some of the ECB's signature policies could preclude him from leading the institution, say observers who follow the ECB closely.

"His record is problematic," said Mr. Gerlach.

Mr. Weidmann has opposed two of the central bank's key crisis-fighting tools, the bond-buying program that emerged out of Mr. Draghi's "whatever it takes" speech in 2012 and the quantitative-easing program in 2015.

Some observers wonder if those southern eurozone countries that were helped by Mr. Draghi's activist policies would support Mr. Weidmann's candidacy. "There will be a discussion that Weidmann represents a very hawkish view and one that would not be to the best interest of the southern economies," said George Pagoulatos, a professor of European Politics at the Athens University of Economics and Business.

However, Mr. Weidmann could adjust his policy preferences as the head of the ECB. "The fact that he's German could give him more elbow space to apply policies that are more beneficial to the eurozone at large," said Mr. Pagoulatos.

Other potential candidates mooted include French central bank governor Francois Villeroy de Galhau and International Monetary Fund head Christine Lagarde, also French. Appointing a woman could help address the lack of women guiding EU institutions.

In withdrawing Mr. Lane's nomination for ECB vice president, Ireland's Finance Minister Paschal Donohoe said he thought the election had to be based on consensus and not the source of any disagreement.

Mr. Lane is still considered to be a top candidate for a future vacancy on the ECB's six-member executive board. The role of chief economist will be available next spring, and the Irishman is thought to be a leading contender for that role.

Write to Todd Buell at todd.buell@wsj.com

(END) Dow Jones Newswires

February 19, 2018 11:42 ET (16:42 GMT)