France's Sarkozy backs Draghi for ECB presidency

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France's Sarkozy backs Draghi for ECB presidency

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French President Nicolas Sarkozy has endorsed Italian Mario Draghi to be the next head the European Central Bank.

At a joint news conference with Italian Prime Minister Silvio Berlusconi in Rome, Sarkozy said: “We aren’t supporting him because he’s Italian. We’re supporting him because he’s an excellent candidate.”

That gives a major boost to the Bank of Italy governor’s hopes of succeeding Frenchman Jean-Claude Trichet who steps down at the end of his term in office later this year.

Draghi’s candidacy has gathered momentum since former Bundesbank president Axel Weber withdrew from the race two months ago.

Sarkozy’s endorsement raises pressure on German Chancellor Angela Merkel, leader of the euro zone’s biggest economy, to accept Draghi as Trichet’s successor.

A German government spokesman declined to comment and said the decision on Trichet’s replacement will be taken at an EU summit in June.

The next ECB president will take over at an extremely sensitive time for the central bank. The ECB raised interest rates earlier this month for the first time in nearly three years after euro zone inflation rose above its target.

It must balance further increases against the risks faced by vulnerable countries in the periphery of the euro zone.