Mario Draghi appointed next President of European Central Bank
June 24, 2011‐ Frankfurt, Germany
Mario Draghi of Italy was appointed as the next president of the European Central Bank. Another Italian will be stepped down from the Executive Board early so as to smoothen the process of Mario Draghi's appointment. Draghi will hold his position from November 1, 2011 till October 31, 2019.
Draghi, an economist will be replacing France's Jean-Claude Trichet who will be completing his 8-year stint with the bank at the end of October 2011.
The French Government expressed concern that two Italians will be on the six-member Executive Board and that there will be no French representation. The other Italian Lorenzo Bini Smaghi will be holding his position till May 2013. The Italian Prime Minister Silvio Berlusconi sensed this and promised to the French President Nicolas Sarkozy that Italy would yield Smaghi's place on the board to a French candidate but asked to return the favor by backing Draghi for the president position. The French appeared to have accepted the deal. However, not everything is smooth as anticipated. Smaghi was reported saying that he has no intention to step down what so ever but the French President was reported to have said at the EU Summit that Smaghi will step down.
The 17 countries that are under the European Central Bank are having many serious troubles because of the bad global economic climate. Hence, the job of Draghi, a 63-year old former economics professor, will not be a smooth sail. Draghi taught at the Harvard, worked for Goldman Sachs and the World Bank and is heading the Financial Stability Board. The FSB is responsible for guiding and reforming the banking system, particularly at crisis times like the present one.
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