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Draghi awaits EU leaders' nod to head ECB

23 June 2011, 20:35 CET
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(BRUSSELS) - Italy's Mario Draghi faced one last hurdle Thursday in his bid to take the helm of the European Central Bank, a European diplomat said ahead of his expected confirmation later in the day by EU leaders.

France was still insisting on winning assurances of a seat on the ECB executive board after Draghi replaces Frenchman Jean-Claude Trichet as head of the central bank, the diplomat said.

Although France has said it backs Draghi's candidacy "unambiguously," and does not intend to block it, Paris wants a "gesture" from Rome, the diplomat added.

The Wall Street Journal reported that Paris was threatening to delay Draghi's confirmation unless it is guaranteed a seat on the board, which would mean another Italian member, Lorenzo Bini Smaghi, would have to stand down.

"If Mr. Draghi succeeds Jean-Claude Trichet in November, Italy will have two representatives in the bank's executive body and France will have none," the diplomat said.

French President Nicolas Sarkozy, who will be joining a crunch summit Thursday and Friday dominated by Greece's debt crisis, has been one of Draghi's most vocal supporters but wants to ensure a seat for his country on the board.

Sarkozy has insisted that under an unwritten rule, the major eurozone countries should each have a seat on the ECB board.

"The support France gives to Mario Draghi is not qualified," French government spokesman Francois Baroin reiterated on Wednesday.

Under a deal struck with Sarkozy earlier this year, Italian Prime Minister Silvio Berlusconi has asked Smaghi to resign.

"Italy has given its word. I have no reason to doubt its word," Sarkozy said last week.

But Smaghi is refusing to budge, insisting that the ECB is an independent body which does not bow to political pressure, as inscribed in the Maastricht treaty which created the eurozone.

Another European diplomat said the issue is to find another position that would satisfy Smaghi. "It's complicated," the diplomat said.

The ECB executive board includes the president, vice president and four other members, all chosen for their experience in monetary policy or banking.

Draghi, a 63-year-old former Goldman Sachs banker, secured the European Parliament's full backing ahead of the summit dominated by deep turbulence in the eurozone, with fears that the Greek debt crisis could sing the single currency area.

"In these tough economic times, it is reassuring to know that the eurozone will be in safe hands with Mr. Draghi and I look forward to working with him," said European Parliament president Jerzy Buzek.


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