ECB member Smaghi rejects pressure to make way

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A top official at the European Central Bank, Lorenzo Bini Smaghi, rejected pressure for him to resign to make way for a French official, invoking the example of Saint Thomas More, executed for defying English King Henry VIII.

Smaghi, a member of the executive board which runs the ECB, told the newspaper Corriere della Sera that the Maastricht treaty which created the eurozone assured the independence of the bank and of its staff.

"In Europe, it is the Maastricht treaty with defines and protects the independence of the ECB and national banks," Smaghi said before meeting on Thursday with Prime Minister Silvio Berlusconi, who requested his resignation.

"But other than operational, institutional and financial independence, there is also the independence of personnel, which guarantees they may remain in their posts in decision-making bodies for their full term of their appointments and protects them against arbitrary dismissal," he added.

Berlusconi wants Smaghi to step down to make way on the executive board for a representative from France, which supported Italy's Mario Draghi as the next ECB president later this year.

As things currently stand when ECB President Jean-Claude Trichet stands down later this year France will no longer have a representative on the bank's executive board.

Smaghi declined to comment after his meeting with Berlusconi.

In an earlier conference at the Vatican, Smaghi evoked More as a symbol for central bankers.

More, "with his independence of judgment and firm conviction in the supremacy of the public interest succeeded in resisting the pressure of Henry VIII -- to whom he was the closest advisor before being named chancellor -- until he was forced to resign, incarcerated and condemned to death."

Appointing Smaghi to replace Draghi as the head of the Bank of Italy has been one widely floated solution, although the Italian press said candidates supported by Draghi and Economy Minister Giulio Tremonti had better chances of getting the job.

© 2011 AFP

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