GERMAN CHANCELLOR Angela Merkel has backed Italian central bank chief Mario Draghi for the presidency of the European Central Bank (ECB), making it a virtual certainty that he will succeed Jean-Claude Trichet later this year.
Mr Draghi’s endorsement by the German chancellor, who is kingmaker in the contest for the prestigious post, adds to support from France, Spain, Italy and Luxembourg.
With the ECB supporting Ireland’s banks to the tune of €150 billion, Mr Draghi will have a crucial say over the future course of the Irish bank rescue and the EU-IMF bailout plan.
Amid mounting anxiety about the Greek bailout, he comes to the fore as the EU authorities try to convince sceptical markets that debt default is not in prospect for the country.
There is no expectation that Mr Draghi would radically change the policies Mr Trichet pursues at the helm of the Frankfurt-based bank, which increased interest rates last month for the first time in three years.
“I would not think that he will be very different in his approach to Trichet,” said businessman Peter Sutherland, who worked closely with Mr Draghi on the board of Goldman Sachs International before he went to the Bank of Italy. “He is absolutely first class . . . and has always been a strong believer in Europe and European solutions.”
Higher than expected inflation justifies further ECB interest rate increases even as the euro zone grapples with the Greek crisis, one of its top policymakers has hinted.
Dr Merkel’s spokesman said yesterday that she would support Mr Draghi. This ends uncertainty about the race to succeed Mr Trichet, who retires in November after eight years.
Mr Draghi took prime position for the post in February when the then Budesbank chief Axel Weber, long the favourite, declared he was not interested in the post.
However, Dr Merkel did not declare her intentions until yesterday. “I know Mario Draghi. He is a very interesting and experienced individual,” she told Die Zeit. “He stands very close to our agenda of stability and solid economics.” EU leaders are likely to finalise the appointment at a summit next month. There is no other candidate.
A former economics professor, Mr Draghi was dubbed “Super Mario” in Italy for his work rate at the helm of the Italian treasury in a troubled period in the 1990s.
Despite unyielding pressure on Greece, there was some good news last night for the European authorities when Finland’s prime minister-elect Jyrki Katainen secured agreement to back the rescue of Portugal.
Mr Katainen, who serves as finance minister, said he would attend next Monday’s meeting with a mandate to approve the Portuguese bailout. “The crisis is not over and Finland cannot be the country which shakes the fragile situation by keeping things unresolved,” he said.
