Italy's Draghi set to take ECB crown despite IMF storm

16th May 2011, Comments 0 comments

Italy's Mario Draghi was set to be named as the next president of the European Central Bank on Monday as he denied having any interest in replacing the IMF's embattled chief.

Removing any doubts that Dominique Strauss-Kahn's arrest on sex assault charges in New York could affect his ECB candidacy, a spokesman for the Bank of Italy said Draghi was "not at all interested" in the IMF job.

At a meeting in Brussels on Europe's debt crisis, eurozone finance ministers were tipped to endorse Draghi to succeed Frenchman Jean-Claude Trichet at the helm of the ECB after German Chancellor Angela Merkel backed him last week.

For months German media had reported that Merkel wanted him to take over the International Monetary Fund instead of the ECB, when Strauss-Kahn's term ended in 2012.

But when asked whether Berlin might endorse Draghi in light of Strauss-Kahn's arrest, German government spokesman Steffen Seibert said Berline 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 favour 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, known in Italy as "Super Mario", had already received the backing of the other key leader in the eurozone, French President Nicolas Sarkozy.

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.

Luxembourg Prime Minister Jean-Claude Juncker, who heads the so-called Eurogroup of finance ministers, also voiced support for Draghi last week and called for a quick decision on the next ECB chief, saying it would "show a great deal of decision-making authority... in these difficult times."

In addition to picking the next ECB president, EU finance ministers meeting on Monday and Tuesday must seal a 78-billion-euro bailout for Portugal and discuss the possibility of fresh aid to Greece.

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

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.

Draghi's stated support for ensuring that eurozone inflation remains in check and that governments respect strict fiscal guidelines has been crucial in garnering support from Germany.

Merkel had dragged her feet before voicing support for Draghi, waiting until last Wednesday to endorse him.

She told Die Zeit newspaper that Draghi was "a very interesting and experienced figure. He is very close to our conception of a culture of stability and a solid economy."

Berlin had no viable candidate of its own after former Bundesbank president Axel Weber announced his resignation in February.

Draghi played to German public opinion in February when he told a newspaper: "We should all follow the German example" when it came to questions of economic reforms.

© 2011 AFP

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