Sarkozy backs Italian as Trichet's successor

FRENCH PRESIDENT Nicolas Sarkozy considers Bank of Italy governor Mario Draghi the leading candidate to succeed Jean-Claude Trichet at the helm of the European Central Bank.

Draghi’s status as the only candidate from among the four biggest euro nations – France, Germany, Italy and Spain – makes him the most viable choice, according to a person familiar with the matter.

Support from Mr Sarkozy would follow signals from German officials that the Italian is their preferred banker, adding momentum to his campaign.

The French leader may make his views public as early as tomorrow at a joint briefing in Rome with Italian prime minister Silvio Berlusconi, a Sarkozy aide told reporters.

The key decision maker, German chancellor Angela Merkel, has yet to tip her hand.

With a late-June deadline to make the appointment, Mr Draghi’s career and the ECB’s fate are caught up in her political calculus.

As Portugal’s looming rescue pushes the cost of aiding euro states past €250 billion, Ms Merkel, who is struggling to rally support for bailouts at home, may face domestic criticism for choosing a southern European from a country with a legacy of inflation and debt.

Mr Draghi has emerged as a front-runner since Germany’s Axel Weber withdrew from the race in February.

Now, German finance minister Wolfgang Schaüble also sees him as the candidate likeliest to be appointed as the ECB’s next chief, people close to him say.

Trichet’s eight-year term ends on October 31st.

German deputy foreign minister Werner Hoyer, who manages European affairs, said in an interview earlier this month that Mr Draghi would make a “very good” ECB president and uphold Germany’s goal of a stable euro.

Mr Draghi, a 63-year-old Massachusetts Institute of Technology-trained economist, has worked at the World Bank and Goldman Sachs. He is also chairman of the Financial Stability Board, which was established by the Group of 20 nations in 2009 to oversee development of standards to strengthen global regulation. – (Bloomberg)