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EP Committee Endorses Italian Mario Draghi for President of ECB.

Mario Draghi was recommended to succeed Jean-Claude Trichet as President of the European Central Bank in a vote of the Economic and Monetary Affairs Committee of the European Parliament on Wednesday.

The committee opinion - 33 in favor, 2 against and 4 abstentions - now needs to be confirmed by a vote of the European Parliament as a whole, scheduled for 23 June.

Draghi, the Governor of Banca d'Italia, Italy's central bank, told MEPs Wednesday that the ECB must not be diverted from its primary goal of price stability and that he would use the European Parliament venue to strengthen the Bank's accountability to citizens.

Voluntary involvement of private investors as part of a solution to the Greek crisis is workable, he added during his two-hour hearing with the Economic and Monetary Affairs Committee of the European Parliament Wednesday.

Draghi was questioned on his vision for the ECB, the best model for a revamped economic governance system, the best way out of Greece's sovereign debt crisis, and also on his past as vice-chairman of the Goldman Sachs investment bank.

"This was my first experience of democratic accountability, and it was one of the greatest learning experiences I have ever had", Mr Draghi told journalists after the hearing.

"Mario Draghi put up a very competent and interesting performance at his hearing, which gained wide support in the Economic and Monetary Affairs Committee. I am very pleased to put forward a positive recommendation for him to next week's plenary and look forward to working with him", said committee chair Sharon Bowles (ALDE, UK).

Draghi has defended the ECB's hawkish attitude towards inflation, saying that nothing, not even a sovereign debt crisis, should divert its attention from this. He has also recognized that the ECB's role in assessing risk and participating in monetary policy had grown. Asked by MEPs about this role, he insisted that the ECB had neither lost its independence, nor was overstepping its mandate, provided it did not enter the field of politics.

On the issue of Greece, Draghi stuck to Mr Trichet's stance of "no default", but nonetheless accepted that private investors could be included in the picture of a solution for Greece provided that this was "entirely voluntary", as had been the case in 2009 for some central and eastern European countries.

"The cost of a real default will exceed the benefits and will not address the root causes. Moreover we do not know what contagion effects it will have", said Mr Draghi, quashing arguments that the main reason for his stance was that the ECB was too exposed to Greece's debt, as cited by the EP press service.

As far as economic governance is concerned Draghi has called for efforts to strengthen and build upon what already existed rather than look too far ahead.

"The economic governance legislative package can be more ambitious. We need more automaticity as Parliament is rightly pushing for and more sanctions".

Commenting on the idea recently put forth by the outgoing head of the European Central Bank Jean-Claude Trichet about the benefits of establishing an EU Finance Ministry, Draghi said there was not enough EU integration for this step. For the same reason, he also said that Eurobonds were currently "a step too far".

A few MEPs asked Mr Draghi about his past involvement with Goldman Sachs and whether this could negatively affect his perceived integrity as ECB head. Draghi defended himself by saying that he was not involved in the bank's work with governments and that his track record since then in clamping down on the banking sector and warning about the build up of risk proved that he would not be in the pocket of the financial industry.
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Publication:Sofia News Agency
Date:Jun 15, 2011
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