Germany's Weidmann unfit as ECB next president - Italy's League

Germany's Weidmann unfit as ECB next president - Italy's League
Germany's Bundesbank President Jens Weidmann speaks during an economics conference in Linz, Austria, July 5, 2018. REUTERS/Lisi Niesner - RC1FF2ADA760   -  Copyright  Lisi Niesner(Reuters)
By Reuters

ROME (Reuters) – A top official from Italy’s ruling League party voiced opposition on Thursday to German central bank chief Jens Weidmann becoming the next governor of the European Central Bank, saying such an appointment could lead Europe to disintegrate.

    ECB President Mario Draghi, an Italian, is due to stand down when his eight-year term expires in October 2019.

    Germany is seen as eager to claim the presidency for the first time, two decades after the ECB’s creation. Bundesbank President Weidmann has not been officially put forward for the post but is widely considered to be the most obvious candidate.

    “Weidmann would not be a good choice for Italy,” Claudio Borghi told Reuters over the phone.

    “Weidmann’s hawkish views, that are restrictive monetary and fiscal policy, could lead Europe to disintegration. On the contrary, the decision of Draghi to purchase EU sovereign bonds with so-called quantitative easing has held the currency bloc together.”

    Borghi plays an important policy-making role inside the League, which governs in coalition with the anti-establishment 5-Star Movement, though he does not hold a government office.

While Italy doesn’t have an outright veto, traditionally the biggest countries have agreed on a candidate, so Italy’s opposition would be a big hurdle. 

    Weidmann has alienated some officials with his opposition to the ECB’s ultra-easy monetary policy, which is credited with reviving economic growth. Some regarded this as disloyalty in a time of crisis.

    He has also criticised Rome’s performance in cutting its debt and engaged in public exchanges with former centre-left Italian prime minister Matteo Renzi.

    This month, Weidmann told a radio interview that the next ECB chief must be someone who can tighten the money taps after years of crisis-fighting and stimulus.

    Borghi, a eurosceptic economist who wrote a pamphlet called “STOPEURO”, said it was premature to say which candidate Italy would back for the ECB top job.

    With Draghi stepping down next year, Rome wants to retain Italian influence at the top of the ECB by backing an Italian to replace France’s Daniele Nouy as ECB bank supervisory chief. Nouy’s term ends on Dec. 31.

    Three senior Italian banking sources said they expected European Banking Authority chairman Andrea Enria, an Italian, to apply to succeed Nouy. One of them said another potential candidate could be ECB supervisor Ignazio Angeloni.

    “I’m not going to comment on names. Italy will seek people competent and who care about Italian interest to be proposed to all the European top jobs,” Borghi said.

(This version of the story refiled to add Borghi’s dropped first name Claudio).

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