EU confirms Draghi in ECB top job

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EU confirms Draghi in ECB top job

EU confirms Draghi in ECB top job
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EU leaders have appointed Italy’s Mario Draghi as the next president of the European Central Bank.

He will replace Frenchman Jean-Claude Trichet, who steps down at the end of October after eight years in the euro zone’s top monetary policy post.

Draghi, who takes over at the most difficult time in the ECB’s 13-year history, was welcomed by the European Commission President, Jose Barroso: “I want to congratulate Mario Draghi on his appointment as president of the ECB from 1st November this year. I know him well, I know his commitment to Europe, his exceptional competence in economic and monetary affair; we wish him the best.”

The 63-year-old had satisfied the European Parliament’s finance that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position and he touted his experience in overseeing Europe’s Financial Stability Board.

Clearing the way for Draghi, another Italian will step down from the ECB’s Executive Board early.

Lorenzo Bini Smaghi was not due to leave until May 2013 but will quit so that a French candidate can join the board in return for France’s backing of Draghi for president.

That part of the appointment has been an embarrassment for Italian Prime Minister Silvio Berlusconi.

In April he promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi’s place on the board.

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

However, Sarkozy said at the EU summit that Bini Smaghi had told him he would leave his post on the board early: “Lorenzo Bini Smaghi telephoned me to say that before the end of the year he would be appointed to new duties.”

One source familiar with the situation said Bini Smaghi still believed the outcome would rest with the Italian government, and he would not be pressed into leaving unless the government found him a suitable alternative.

Bini Smaghi wants to avoid any impression that pressure on him could compromise the ECB’s independence, and therefore thinks he should only leave his current post for a similar and not inferior position, the source said.

The job that most appears to fit the bill is Draghi’s post at the Bank of Italy, which would allow Bini Smaghi to keep a vote on the ECB’s Governing Council.

“As President Trichet said earlier, all the members of the executive board have been appointed for eight years according to the Treaty,” an ECB spokesman said. “Mr Bini Smaghi will take any future decision in full independence.”

Berlusconi told reporters in Brussels that Bini Smaghi was one of three candidates to succeed Draghi as head of the Bank of Italy, adding that a decision on the replacement had not yet been made but a candidate would be proposed next week.