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Italian bank governor to become next chief of European Central Bank

Mario Draghi will take over on November 1, when Jean-Claude Trichet’s eight-year term comes to an end. So who is he?

Can Super Mario save the Eurozone from fracturing completely?
Can Super Mario save the Eurozone from fracturing completely?
Image: Riccardo De Luca/AP

EUROPEAN FINANCE MINISTERS have confirmed that Mario Draghi, the current governor of Italy’s Central Bank, will become the next president of the European Central Bank in November.

The two-day summit of European finance ministers continuing in Brussels today last night confirmed that Draghi was the only candidate for the position, and that as a result he will succeed Jean-Claude Trichet when the Frenchman’s eight-year term ends this year.

An experienced private banker as well as civil servant, Draghi became the director-general of the Italian Treasury – the most senior civil servant in the Italian department of finance – in 1991, moving onward to become a managing director of Goldman Sachs after a ten-year stint.

He also holds a PhD in economics from the Massachusetts Institute of Technology, having been supervised in his work by Nobel prizewinners Robert Solow and Franco Modigliani. Thereafter he had pursued academic life until being appointed to the Treasury.

It had been unclear for some time whether Draghi would be a universally acceptable appointment to succeed Trichet, though his case was bolstered by strong editorial lines from The Financial Times, The Economist and the German newspaper Bild.

His candidacy was all but confirmed when Angela Merkel gave him her backing, meaning his name commanded sufficient clout among the Eurozone’s biggest members – with France and Spain already on board as well as his native Italy.

Occasionally dubbed “Super Mario”, Draghi faces an uphill challenge in trying to bolster confidence in the Eurozone, which has lurched from crisis to crisis in the past year with Greece, Ireland and now Portugal all being frozen out of the world’s money markets.

It is thought that Draghi might take a more hospitable approach to any requests from bailout recipients like Ireland to reschedule their series of repayments, though the matter of the interest rate payable on those loans is still a matter for EU finance ministers.

Draghi will also have to tackle the worries about inflation in the Eurozone, where interest rates are likely to have been raised significantly before he takes office – although the inflation rates of differing countries will pose many problems for a monetary union at danger of totally fragmenting.

Draghi’s appointment is set for ratification by the European Parliament next month, with his eight-year tenure then officially beginning in November.

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Gavan Reilly

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