Sunday

16th Jun 2019

Leaders back Mario Draghi as next ECB president

  • Mario Draghi is head of Italy's central bank and the Financial Stability Board (Photo: European Parliament)

Italian central banker Mario Draghi has won the backing of EU leaders to become the next president of the European Central Bank (ECB) from the 1 November.

EU leaders made the decision at a European Summit in Brussels on Friday (24 June) at a time of unprecedented turmoil for the 17-member eurozone.

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"We are all confident that Mr Draghi will exercise strong and independent leadership of the ECB, continuing the tradition started by the banks first two presidents," European Council President Herman Van Rompuy told journalists after the meeting.

"This is essential in normal times and indispensable in difficult times," he added.

A potential hurdle to Draghi's smooth takeover from current ECB President Jean-Claude Trichet was removed earlier in the day, amid French concerns of a loss of influence on the bank's executive board.

With Trichet stepping down, France will be without a member on the six-person panel, while Italy will have two in the form of Draghi and Lorenzo Bini Smaghi.

An implied French threat to block Draghi's takeover was averted however when Smaghi signaled he would step down before the end of his full term expired.

"I spoke to Mr Smaghi this morning by phone and he did tell me personally that he would not see his mandate as a member of the governing board through to its end," said Van Rompuy.

"It's up to Mr Smaghi to decide what timetable he may have."

French President Nicolas Sarkozy told journalists in Brussels on Friday that Smaghi intended to step down before the end of the year, after the two men also spoke by telephone.

Principally tasked with setting interest rates for the 17-member eurozone, the ECB has seen its role increase significantly during the financial and economic crises, including a controversial bond-buying exercise opposed at the time by former Bundesbank chief Axel Weber.

Widely tipped to take over from Trichet, Weber surprised the administration of German Chancellor Angela Merkel in February when he signaled his plans to leave the Bundesbank and disinterest in the ECB's top job.

The announcement opened the door for Draghi, with MEPs also throwing their support behind the Italian earlier this month.

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