EU leaders make Draghi next ECB president

European Union leaders appointed Italy’s Mario Draghi as the next president of the European Central Bank on Friday — a move that gives investors much-needed certainty over who will lead the institution in its pivotal role in the fight against the crippling debt crisis.

BRUSSELS, Belgium — European Union leaders appointed Italy’s Mario Draghi as the next president of the European Central Bank on Friday — a move that gives investors much-needed certainty over who will lead the institution in its pivotal role in the fight against the crippling debt crisis.

The head of Italy’s central bank, Draghi is expected to adopt his predecessor’s tough stand on inflation when he takes over the helm of the ECB on Nov. 1, a day after the term of President Jean-Claude Trichet expires.

“Mr. Draghi will exercise a strong and independent leadership of the ECB,” said EU President Herman Van Rompuy. “This is essential in normal times, and indispensable in difficult times.”

The timing of Draghi’s appointment had come under doubt as fellow Italian executive board member Lorenzo Bini Smaghi had until Friday refused to leave his post.

With Bini Smaghi staying on the executive board, France would not have a representative on the six-person board once Trichet departs on Oct. 31. The French had previously implied they would only support Draghi if a French man or woman takes Bini Smaghi’s spot.

On Friday, French President Nicolas Sarkozy said Bini Smaghi had informed him and EU President Van Rompuy that he would step down by the end of the year. He did not say what French candidate would take his spot.

German Chancellor Angela Merkel, meanwhile, rejected the claim that pressure applied on Bini Smaghi to resign his post by the Italian government had endangered the independence of the ECB.

“I believe that the independence of the European Central Bank, as regards its ability to perform its tasks, has been preserved entirely,” she told reporters.

The European Parliament and the ECB board had already given their approve to Draghi’s appointment.

Delaying his appointment until their next summit in September would have underlined divisions among EU leaders, who have already struggled to find a common line on debt-stricken Greece and the best way of containing the financial crisis that has also pushed Ireland and Portugal into needing massive bailouts.

The ECB has played a central role during the debt crisis that has afflicted the 17-country eurozone.

over the past 18 months or so. For example, Trichet overrode criticism from some of the more hawkish officials at the bank when he backed a multibillion euro (dollar) bond-buying program intended to ease the pressure on the more indebted countries.

More recently, the ECB has found itself in the difficult position of raising interest rates to keep a lid on above-target inflation levels even though the weaker eurozone economies are still struggling.

The 63-year-old Draghi will start his eight-year term at the ECB on Nov. 1. The former managing director at U.S. investment bank Goldman Sachs also runs the Financial Stability Board, an international organization that seeks to head off risks for the global financial system.

The decision on Draghi came a day after EU leaders gave their clearest sign yet that Greece will get a second bailout in the coming weeks, on top of last year’s C110 billion ($156 billion).

“We agreed that there will be a new program for Greece,” said German Chancellor Angela Merkel.

The stronger language on aid for Greece was also made possible after debt inspectors from the EU and the International Monetary Fund reached a final deal Thursday with the government in Athens on C28 billion worth of new austerity measures.

The measures have to be passed by the Greek Parliament next week for the bailout funds to be released. If lawmakers fail to back the package, then Greece will likely be staring at a default on its debts.

Even if it gets a second bailout, many economists think that Greece will have to restructure its debts in some shape or form in the coming years, especially if the economy shrinks further.

———

David McHugh in Frankfurt and Angela Charlton contributed to this story.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The QEII was closed Sunday morning due to a pole fire. (Photo courtesy City of Red Deer)
UPDATE: QEII near Red Deer reopens

The QEII has been reopened after being closed due to a pole… Continue reading

Innisfail RCMP are investigating a single-vehicle crash that happened west of Bowden on March 21, 2021. (File photo by Advocate staff)
Bashaw RCMP investigate fatal collision in central Alberta

Bashaw RCMP are investigating after a fatal collision Saturday afternoon. Police were… Continue reading

A damaged unicorn statue is shown in a field outside of Delia, Alta. in this undated handout photo. It's not often police can report that a unicorn has been found, but it was the truth Saturday when RCMP said a stolen, stainless-steel statue of the mythical beast had been located in a field not far from where he'd been taken. THE CANADIAN PRESS/HO, RCMP *MANDATORY CREDIT*
Mounties get their unicorn; stolen statue of mythical beast found in Alberta field

DELIA, Alta. — It’s not often police can report that a unicorn… Continue reading

Red Deer Rebels forward Ethan Rowland battles with Medicine Hat Tigers forward Brett Kemp during WHL action at the Centrium Saturday night. (Photo by ROB WALLATOR/Red Deer Rebels)
Tigers claw back, hand Rebels 11th straight loss

Tigers 5 Rebels 2 The same old issues continue to plague the… Continue reading

There were six additional deaths across Alberta reported over the past 24 hours, bringing the death toll to 1,926 since the beginning of the pandemic. (File photo)
Investigators from the Vancouver Police Department were in Chilliwack Saturday, collecting evidence connected to a double homicide. (file photo)
Police investigate shooting death of man outside downtown Vancouver restaurant

Vancouver police say one man was killed in what they believe was… Continue reading

Dr. E. Kwok administers a COVID-19 vaccine to a recipient at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS/Jonathan Hayward
B.C. to start registering people 18 years and older for COVID-19 vaccines

VICTORIA — The British Columbia government says it’s inviting people 18 years… Continue reading

San Jose's Tomas Hertl, center, celebrates with teammates Patrick Marleau, left, and Rudolfs Blacers, right, after Hertl scored a goal during the first period of an NHL hockey game against the Minnesota Wild, Friday, April 16, 2021, in St. Paul, Minn. (AP Photo/Stacy Bengs)
Patrick Marleau set to break Gordie Howe’s games record

For Patrick Marleau, the best part about Monday night when he is… Continue reading

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, speaks during a press briefing at the White House, Tuesday, April 13, 2021, in Washington. (AP Photo/Patrick Semansky)
Half of U.S. adults have received at least one COVID-19 shot

WASHINGTON — Half of all adults in the U.S. have received at… Continue reading

People are shown at a COVID-19 vaccination site in Montreal, Sunday, April 18, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Federal government to send health-care workers to Ontario, Trudeau says

MONTREAL — Prime Minister Justin Trudeau says federal departments and some Canadian… Continue reading

People cross a busy street in the shopping district of Flushing on Tuesday, March 30, 2021, in the Queens borough of New York. Access to the COVID-19 vaccine in the United States is growing by the day. THE CANADIAN PRESS/AP-Kathy Willens
Despite COVID-19 vaccines, Americans in D.C. not feeling celebratory — or charitable

WASHINGTON — This might make Canadians jealous of their American cousins for… Continue reading

A man pays his respects at a roadside memorial in Portapique, N.S. on Thursday, April 23, 2021. RCMP say at least 22 people are dead after a man who at one point wore a police uniform and drove a mock-up cruiser, went on a murder rampage in Portapique and several other Nova Scotia communities. THE CANADIAN PRESS/Andrew Vaughan
Memorial service in Nova Scotia marks one year since mass shooting started

TRURO, N.S. — A memorial service is planned for today in central… Continue reading

In this April 23, 2016, photo, David Goethel sorts cod and haddock while fishing off the coast of New Hampshire. To Goethel, cod represents his identity, his ticket to middle class life, and his link to one the country's most historic industries, a fisherman who has caught New England's most recognized fish for more than 30 years. (AP Photo/Robert F. Bukaty)
‘It’s more than just a fish:’ Scientists worry cod will never come back in N.L.

ST. JOHN’S, N.L. — The latest assessment of Atlantic cod stocks, whose… Continue reading

Most Read