By Tom Fairless and Patricia Kowsmann 

FRANKFURT -- Germany's outsize influence at the European Central Bank is raising concerns among some eurozone officials and banking executives ahead of a decision over whether to name a German to lead the institution for the first time.

The ECB, based here in Germany's financial capital, has more German nationals on its staff than French, Italians and Spanish combined, according to new data that could heighten concerns over German dominance of the European Union's most important institutions. Of roughly 2,900 ECB staff on permanent or fixed-term contracts, 29% are German, while only 8% are French, according to 2017 data seen by The Wall Street Journal.

Eurozone leaders are preparing sensitive decisions over the future of their currency union, including who to appoint as the ECB's president when Mario Draghi steps down next year. German Bundesbank President Jens Weidmann is considered a favorite, partly because the post has never been held by a German.

But the data reviewed by the Journal shows Germans already have a giant footprint at the institution. The ECB doesn't make the data public, unlike other EU institutions such as the Brussels-based European Commission, the bloc's executive arm.

One part of the ECB's crucial economics department, responsible for forecasts and policy recommendations, was known internally as the "panzer division" under Jürgen Stark, the bank's former chief economist, because the line of command was almost exclusively German, according to a person familiar with the matter. Mr. Stark left the bank in 2011 and was replaced by Peter Praet, a Belgian citizen who is half-German. The share of German nationals in the economics division has increased from 30% in 2010 to 34% in 2017.

"There is a 'Germanization' of the ECB, which of course feeds into this feeling of bias against peripheral countries," said the chief executive of a bank in Southern Europe, where Germany was widely criticized for pushing excessive austerity during the region's recent debt crisis.

Research shows national origin can color an employee's attitudes toward the economy and inflation, and ultimately feed into policy decisions. A 2011 study by German economics think tank Ifo found that the nationality of ECB managers seemed to affect the bank's decisions on interest rates.

The nationality of ECB staff "is extremely important," said Karel Lannoo, chief executive of the Center for European Policy Studies, a Brussels think tank. Germans have "a certain view on austerity, how you handle money, how you handle leverage, a very strong view on quantitative easing," he said, adding he has noticed an increasing share of German names among top ECB staff.

The ECB's 25-member rate-setting committee comprises the central-bank governors of all 19 euro members plus the ECB's executive board, so it includes only two Germans.

The ECB is often criticized in German media for its anti-crisis stimulus measures under Mr. Draghi, an Italian. But elsewhere in the eurozone, many think the ECB took too long to act aggressively against the crisis because of German sensibilities.

Against that background, appointing a German to run the central bank could aggravate concerns over excessive German influence. The ECB was modeled on Germany's Bundesbank, which is also in Frankfurt, and has been criticized in the past for worrying too much about inflation, a German bugbear.

One official at a eurozone central bank said the ECB has publicly criticized banking practices in Italy, Portugal and Greece while sparing German lenders. "There are different treatments for different countries, " the official said.

German over-representation at the ECB has been steady over time and extends across all levels of the institution. Among 53 managers in stratum immediately below the bank's rate-setting committee, 16 are German, or around 30%. In the management level below that, comprising roughly 280 staff, 27% were German last year. Also, four of the six top advisers to the ECB's executive board are German.

An ECB spokesman said the bank recruits on the basis of excellence, not nationality. "Since we are situated in Germany it is natural that many German citizens work for us and this has always been the case throughout our 20-year history," the spokesman said.

Given its Frankfurt location, it isn't surprising that Germans should make up a large share of ECB staff, particularly lower-level employees. Belgians make up 16% of staff at the Brussels-based European Commission, more than any other national group, though still only slightly more than half the share of Germans at the ECB.

The second-most powerful official at the ECB's banking supervisor, after France's Daniele Nouy, is Sabine Lautenschläger, a German. Of the four supervision directors immediately below Ms. Nouy, two are German.

Ms. Lautenschläger couldn't be reached for comment.

The separate Brussels-based institution that deals with collapsing banks is also run by a German, Elke König.

"Nationality shouldn't matter in principle but of course it does. People from different countries have different biases and ties that affect policy," said Carlos Bowles, an ECB economist who chairs the bank's staff committee. Mr. Bowles wouldn't comment on any specific nationality.

Write to Tom Fairless at tom.fairless@wsj.com and Patricia Kowsmann at patricia.kowsmann@wsj.com

(END) Dow Jones Newswires

March 20, 2018 05:55 ET (09:55 GMT)