France considers Bank of Italy Governor Mario Draghi the leading candidate to succeed Jean-Claude Trichet at the helm of the European Central Bank. However the key decision maker, German Chancellor Angela Merkel, has yet to tip her hand. Merkel’s aides have indicated that Germany, Europe’s biggest economy, no longer insists on a German to succeed Trichet.
With a late-June deadline looming, the appointment may become entangled in German opposition to bailouts. As Portugal’s imminent rescue pushes the cost of aiding Euro states past 250 billion Euros, Merkel may face domestic criticism for choosing a southern European from a country with a legacy of inflation and debt.
Draghi’s status as the only candidate from among the four biggest euro nations -- France, Germany, Italy and Spain -- makes him the most viable choice according to President Nicholas Sarkozy’s view, according to press reports from Paris.
Other candidates include Yves Mersch of Luxembourg, Erkki Liikanen of Finland and Nout Wellink of the Netherlands. Klaus Regling, a German who runs the bailout facility, has never been a central banker.
Draghi, or ‘Super Mario’ as he is referred, has emerged as a front-runner since Germany’s Axel Weber withdrew from the race in February. Now, German Finance Minister Wolfgang Schaeuble sees him as the candidate likeliest to be appointed as the ECB next chief. Trichet’s eight-year term ends Oct. 31.
German Deputy Foreign Minister Werner Hoyer, who manages European affairs, said in an April 15 interview that Draghi would make a “very good” ECB president and uphold Germany’s goal of a stable Euro.
Draghi, 63, a Massachusetts Institute of Technology-trained economist, has worked at the World Bank and Goldman Sachs Group Inc. He is also chairman of the Financial Stability Board, which was established by the Group of 20 nations in 2009 to oversee development of standards to strengthen global regulation.
In a sign he understands the need to meet the scepticism head on, Draghi has been appealing to the German inflation- fighting mindset. He said April 13 that monetary policy is still “accommodative” even after the ECB raised its benchmark rate this month.
In February, he told newspaper Frankfurter Allgemeine Zeitung that Germany is an example for other nations, calling for tougher sanctions for budget-rule breaches and vowing to ensure price stability.