Somehow occupied with local Russian politics and the next presidential elections in this country I missed the news of the decade – the next CEO of the ECB comes from Italy and stays at this post until 2019.
Despite Draghi being the only candidate in the final stage of “elections” (unfortunately, his strong competitor, German CB governor Alex Webber withdrew his candidacy early this year) his candidacy was not accepted easily. France, as always, had something to say.
Financial Times (24 June 2011) reports:
In a stark illustration of the delicate balance of relationships within the eurozone and its impact on decision-making, Mr Draghi’s appointment was almost derailed when Nicolas Sarkozy, French president, threatened to block the nomination because it would allow two Italians to sit on the ECB’s six-person executive board.
According to people briefed on the events, Herman Van Rompuy, who chairs the summit as president of the European Council, was forced to pause the meeting around midday and telephone Lorenzo Bini Smaghi, the board’s Italian member, to plead with him to resolve the standoff.
Citing the ECB’s statutory independence from political pressure, Mr Bini Smaghi has refused for weeks to stand down, despite calls for his resignation by Silvio Berlusconi, the Italian prime minister who promised Mr Sarkozy in April that the Italian economist would step aside for a Frenchman.
Mr Bini Smaghi is said to have become concerned about the impact that a delay in Mr Draghi’s appointment would have on financial markets. According to people briefed on the phone call, Mr Van Rompuy informed Mr Bini Smaghi of the impasse and said Mr Sarkozy had angrily vowed to delay Mr Draghi’s appointment unless the standoff was resolved. The atmosphere at the summit had become bad tempered, with the French president questioning Mr Berlusconi’s assurances that Mr Bini Smaghi would resign. (…)
ECB officials have warned that putting pressure on Mr Bini Smaghi to leave his post would threaten the bank’s independence.
It seems like all the politics, even that at the monetary policy level, looks like TV telenovela: he said, she said, I support but at the same time I’m against. I personally support Smaghi to stay at his post until the end of his tenure (end of 2012). Although I’m afraid the pressure will be too large for him to handle and he decide to quit his ECB Board position. Meanwhile we have to deal with the Italian president of the ECB and I can’t wait to see how the situation resolves.