Berlin's own plans for the succession

Germany clears path for 'Super Mario' as ECB chief

GMT 15:43 2011 Sunday ,24 April

Arab Today, arab today Germany clears path for 'Super Mario' as ECB chief

 Mario Draghi recently hailed the country as "an example" for the rest of Europe

 Mario Draghi recently hailed the country as "an example" for the rest of Europe Germany appears to be coming round to the idea of a former Goldman Sachs executive from Italy as Europe's top banker, having failed to install its own choice as the next European Central Bank chief.
While the official line from Berlin continues to be that it is too early to speculate on who succeeds France's Jean-Claude Trichet at the helm of the ECB, recent leaks suggest Germany could live with Mario Draghi, dubbed "Super Mario."
Respected business daily Handelsblatt reported this week that German Finance Minister Wolfgang Schaeuble was lobbying behind the scenes for the current Italian central bank chief to take the job when Trichet steps down in October.
"Schaeuble prizes Draghi's good reputation as a central banker, his integrity and his personality," the newspaper cited an unnamed high-level German government official as saying.
On Wednesday, the same newspaper quoted a source from Chancellor Angela Merkel's junior coalition partners as saying: "There is no alternative to Draghi. We will support the Italian."
With the eurozone undergoing an unprecedented deficit and debt crisis and analysts speculating that Spain might be the next domino to fall, the job of Europe's monetary guardian or "Mr Euro" could hardly be more important.
Berlin's own plans for the succession were thrown into disarray when the frontrunner for the job, Axel Weber, head of the powerful German central bank, stepped down surprisingly and ruled himself out of the race.
Germany's main criterion for the job is that the next president must stick to its own "stability-oriented" culture -- jargon for keeping a firm lid on inflation and making sure member states do not run up enormous public deficits.
"The passport is not the main thing," Merkel's spokesman said in February.
Deputy government spokesman Christoph Steegmans repeated the official line Wednesday, telling reporters: "The decision about the ECB president's successor will not be taken before the end of June and therefore the government will decide closer to the time."
But Klaus-Peter Flosbach, an MP from Merkel's conservatives, spoke for many Germans, telling AFP: "The ECB has to be a haven of price stability. For us, it is essential that its president guarantees monetary policy stability."

Mindful of the importance of Europe's top economy for any nomination, Draghi recently hailed Germany as "an example" for the rest of Europe -- in the German press.
Seen as a smooth communicator and a respected central banker, Draghi has impressed as head of the Financial Stability Forum, a global body set up to develop regulatory and supervisory policies after the 2008 global crisis.
"Judging by his performance, both at the Bank of Italy and at the Financial Stability Board, I would say there is nothing you could say against him," Holger Schmieding, an ECB watcher at Berenberg Bank, told AFP.
"He seems to be doing a very good central banking job. It's very difficult to see political alternatives."
But despite remarks to the contrary, Draghi's nationality will undoubtedly count against him to an extent, with Italy historically not among the most fiscally prudent of eurozone member states.
Another disadvantage is that the vice-president of the institution, Vitor Constancio, comes from Portugal -- another southern European country and one moreover negotiating and EU-IMF debt bailout -- and the EU strives for a geographical balance in its appointments.

Finally, his professional background has caused grumbling. He was a top executive at Goldman Sachs, a US investment bank some have alleged helped Greece hide the true state of its finances from outside scrutiny.
Merkel herself is said to have some doubts. "A southern European would not be a good signal," sources close to the chancellor told Handelsblatt.
Schmieding said the Chancellor is likely to extract her pound of flesh for the move, as having a non-German at the helm represents a major concession for Berlin.
"I think she will use it as a kind of bargaining tool," he said, perhaps forcing through the tougher economic reforms she believes are necessary to drag the eurozone out of its debt crisis.

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