Wed, May 18, 2011 - Page 10 News List

Eurozone anoints Draghi as new ECB head

STAYING IN EUROPE:Germany had wanted ‘Super Mario’ to take over the top spot at the IMF when its managing director steps down, but changed its tune last week

AFP, BRUSSELS

Eurozone finance ministers named Italian Mario Draghi on Monday as their chosen successor to head the European Central Bank (ECB) come October, Eurogroup President and Luxembourg Prime Minister Jean-Claude Juncker announced.

“We unanimously designated Mario Draghi to succeed [European Central Bank President] Jean-Claude Trichet,” Juncker said at a news conference. “Mario Draghi will be the new president of the ECB.”

Juncker said the Italian had both “an excellent international and -European reputation” to take the helm of the Frankfurt-based bank.

“He has proven he is strongly attached to the euro” as well as to the EU, he said.

Known as “Super Mario” at home, his promotion comes after German Chancellor Angela Merkel backed him last week after German media for months had reported she wanted to see Draghi take over the IMF instead of the ECB when IMF Managing Director Dominique Strauss-Kahn’s term was to end next year.

However, when asked whether Berlin might endorse Draghi for the Washington job in light of Strauss-Kahn’s arrest this weekend in New York, German government spokesman Steffen Seibert said Berlin wanted to see the head of the Italian central bank become ECB president.

“The German government, along with other European governments, has spoken out in favor of Draghi taking over as head of the ECB should he decide to apply for the job, and it remains of this opinion,” Seibert said.

The Italian central bank chief had already received the backing of the other key leader in the -eurozone, French President -Nicolas Sarkozy.

“We don’t see any other candidate emerging at the moment,” Irish Finance Minister Michael Noonan said on arrival for the talks in Brussels.

With the ECB spearheading herculean efforts to contain a year-long debt crisis overhanging the euro, observers would like to see a smooth transfer when Trichet steps down in October.

EU heads of state and government will make the final decision on the ECB chief at a summit next month.

Draghi is highly regarded in the global financial sector and has earned kudos as head of the Financial Stability Board, an international body tasked with reforming the sector in the wake of the global economic crisis.

A member of the ECB governing council, which makes key decisions on interest rates, the former Goldman Sachs executive will take over at a stormy time for the euro following EU-IMF rescues for Greece, Ireland and now Portugal.

The ECB, guardian of price stability in the 17-nation eurozone, has propped up the debt of troubled economies by purchasing billions of euros in weak sovereign bonds on secondary markets.

However, it faces growing inflationary pressures, as seen in new data out on Monday confirming the annual rate for last month at 2.8 percent — well above its roughly 2 percent target.

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