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Europe

Mario Draghi appointed next ECB president

Text by NEWS WIRES

Latest update : 2011-06-24

EU leaders appointed Italy's Mario Draghi (pictured) as the next president of the European Central Bank at a Brussels summit on Friday. Draghi will succeed France’s Jean-Claude Trichet on Nov 1.

Reuters - EU leaders appointed Italy’s Mario Draghi as the next president of the European Central Bank on Friday and another Italian on the ECB’s executive board agreed to step down to smooth the process, EU sources said.

In draft conclusions agreed at a summit in Brussels, EU leaders “appointed Mr Mario Draghi president of the European Central Bank from 1 November 2011 to 31 October 2019.”

The 63-year-old economist and banker will replace France’s Jean-Claude Trichet, who steps down at the end of October after eight years in the euro zone’s top monetary policy post.

French officials had expressed concern in recent weeks about Draghi’s appointment as it would have meant two Italians being on the ECB’s six-member executive board with no French representation. The other Italian, Lorenzo Bini Smaghi, is not due to leave his eight-year post until May 2013.

In April, Italian Prime Minister Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi’s place on the board to a French candidate in return for France’s backing of Draghi for president.

But that proved problematic, with Bini Smaghi saying he had absolutely no intention of stepping down early.

EU sources said that Bini Smaghi had assured EU Council President Herman Van Rompuy and Sarkozy in discussions on Friday that he would relinquish his post in the coming weeks.

“We expect an announcement shortly,” one senior EU source said. Another said: “This morning, in the Council, Van Rompuy and the Italians will explain that Bini Smaghi will leave in due time.”

It is not clear what job Bini Smaghi will move to, but it had been expected that he would become head of the Italian central bank or a similar high-level financial post.

Bini Smaghi was not immediately reachable for comment.

Sources in Frankfurt said the ECB was expected to issue a statement later on Friday.

While Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent months, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe’s top central banking job.

In appearances before the European Parliament’s finance committee, Draghi has made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.

He has also underlined his experience in overseeing Europe’s Financial Stability Board, and emphasised the common thinking he shares with Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece’s debt crisis.

Date created : 2011-06-24

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