MARIO DRAGHI, governor of the Bank of Italy, has taken a big step towards succeeding Jean-Claude Trichet as head of the European Central Bank (ECB) after being strongly endorsed by France’s Nicolas Sarkozy, acting with Germany’s tacit blessing.
“France will be very happy to support an Italian for the presidency of the ECB,” the French president said in Rome yesterday at a press conference with Silvio Berlusconi, Italy’s centre-right prime minister. “I know Draghi well. We support him not because he is an Italian but because he is a man of quality.”
Angela Merkel, the German chancellor, is also expected to approve Mr Draghi’s candidacy, according to well-placed officials in Berlin.
The anointment of Mr Draghi marks a remarkable accession for the former Goldman Sachs banker.
In spite of his prominence as head of the Financial Stability Board and his technical expertise, Mr Draghi (63) had earlier been considered as an outsider, mainly because his Italian nationality made him a controversial choice among the German public.
But in February he was propelled to the front of a limited pack when Axel Weber, former president of the German Bundesbank, unexpectedly withdrew his candidacy.
Mr Sarkozy is understood to have given his backing in the knowledge that Mr Draghi would be a candidate with whom Germany – and the German chancellor – can live.
Senior officials in Berlin have described Mr Draghi recently as a “good candidate”. Wolfgang Schäuble, finance minister, was last week reported to have called him “the most realistic candidate”.
France’s declaration of support for Mr Draghi came as relations between France and Italy plumbed their lowest level in years over disputes involving the war in Libya, Italy’s handling of thousands of illegal Tunisian immigrants eager to enter France, and Rome’s attempts to thwart takeovers of key Italian companies by French rivals.
French support for Mr Draghi was previously seen as lukewarm, but the lack of a strong alternative from a leading European country made Mr Sarkozy’s “concession” even easier.
It also came at a price. Mr Sarkozy noted that, in exchange, Mr Berlusconi had agreed that Italy’s Lorenzo Bini Smaghi would yield his place on the ECB’s executive board to a French candidate when Mr Trichet steps down in October.
“Carpet trading” was how one European diplomat described the process as Mr Sarkozy left Rome.
Mr Draghi has been a critic of Mr Berlusconi’s economic policies, ensuring his most visible support in Rome has come from the opposition Democratic party.
Commentators said that was just as well for him given Mr Berlusconi’s poor international standing amid personal scandals and his trial on charges of paying for sex with an underage prostitute.
In Germany, Ms Merkel is likely to face a conservative backlash over the choice of an Italian as guardian of the stability of the euro. But she will insist that it is the culture of stability, not the nationality of the candidate, that matters.
In demanding a German at the helm, Bild, a mass circulation daily, commented that “inflation and Italians” go together “like tomato sauce and spaghetti”. – (Copyright The Financial Times Limited 2011)
