Eurozone finance ministers today narrowed the options to replace the managing director of the European Stability Mechanism from four to three, but failed to select a candidate to replace Klaus Regling after his term ends in October.

According to a memo sent to eurozone capitals and seen by POLITICO, the process is meant to deliver a winner through a process of elimination. Ministers vote by secret ballot and Eurogroup President Paschal Donohoe informs the minister whose candidate has received the least support, in the hope that he will drop out of the race.

The Dutch candidate withdrew after the first round of voting.

This is what happened in the first ballot with the Dutch candidacy of Menno Snel, which the Netherlands subsequently withdrew. But in the second round, Italy refused to back down after Marco Buti emerged as the least favorite of the three contenders - Buti, Portugal's João Leão and Luxembourg's Pierre Gramegna.

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A successful candidate needs 80% support, with votes weighted by a country's share of capital in the ESM - giving France and Germany veto power.

Italy, which holds nearly 18%, could be outvoted if the vast majority of eurozone countries rally behind a single candidate. But he could also form a blocking minority by forming an alliance. The question is what Italy thinks it can gain on other fronts by retaining a doomed bid.

Either way, the campaign will roll out over the next few weeks. Donohoe suspended the contest on Monday evening and will hold further consultations before June 16, when the ESM board of governors meets to elect the next chief executive, according to an EU official.