The European Parliament formally endorsed on Thursday Italy's Mario Draghi to be the next president of the European Central Bank. European Union leaders are expected to give their formal backing to the appointment at a summit allowing Draghi, 63, to take over as head of the bank when Jean-Claude Trichet steps down at the end of October.
French officials have expressed concerns that Italy will have two members on the ECB's executive board once Draghi becomes president. Lorenzo Bini Smaghi is already on the six-member panel, which sets interest rates along with the 17 other Euro zone central bank governors.
France has suggested Bini Smaghi could move to replace Draghi as head of the Italian central bank, opening the way for a French appointment to the ECB executive board.
In April, Italian Prime Minister Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi's place on the ECB board to a French candidate, in return for France's backing of Italy's Mario Draghi for president.
However, Berlusconi had not first consulted Bini Smaghi, whose eight-year term at the ECB does not end until May 2013. Bini Smaghi, who had hoped in vain to be offered Draghi's top job at the Bank of Italy, has refused to quit, leaving Berlusconi with egg on his face and delivering a rare slap in the face to France.
While Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent weeks, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe's top central banking job.
In appearances before the European Parliament's finance committee, Draghi made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.
He has also underlined his experience in overseeing Europe's Financial Stability Board, and emphasized the common thinking he shares with Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece's debt crisis.
According to his non-official biography Draghi graduated from La Sapienza University of Rome under the supervision of Federico Caffé and then earned a Ph D in economics from the Massachusetts Institute of Technology in 1976 under the supervision of Nobel Laureates Franco Modigliani and Robert Solow. He was full professor at the University of Florence from 1981 until 1991. From 1984 to 1990 he was Executive Director of the World Bank.
In 1991, he became director general of the Italian Treasury, and held this office until 2001. During his time at the Treasury, he chaired the committee that revised Italian corporate and financial legislation and drafted the law that governs Italian financial markets. He is also a former board member of several banks and corporations (Eni, IRI, BNL and IMI).
He was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). He is a trustee at the Institute for Advanced Study in Princeton, New Jersey in and also at the Brookings Institution in Washington D.C. He has been a Fellow of the Institute of Politics at the John F. Kennedy School of Government, Harvard University.