EU Council Appoints Mario Draghi President of ECB

German Chancellor Angela Merkel (R) and designated President of the ECB, Mario Draghi (L), pose for the media at the Federal Chancellery in Berlin, Germany, where they were meeting on 16 June 2011. EPA/BGNES

The appointment of Italian banker Mario Draghi as head of the European Central Bank has been finalized after on Friday the EU 27 leaders agreed on it, following his endorsement by the European Parliament.

"The European Council has just agreed on the appointment of Mario Draghi as new president of the European Central Bank,' EU President Herman Van Rompuy wrote on Twitter.

The current head of Banca d'Italia, Italy's central bank, is to take over the European Central Bank from France's Jean-Claude Trichet and start his eight-year mandate on November 1, 2011.

France had threatened to block the decision because Draghi's appointment would have left the country with no representative in the ECB's six-member executive board, while Italy would hold two, DPA reported.

The second Italian, Lorenzo Bini Smaghi - whose term ends in 2013 - was refusing to resign on the grounds that the ECB's independence would be threatened if he were to bow to political pressures. Diplomats said he relented on Friday.

Amid concern that any hesitation on Draghi would further spook markets already on high alert over the Greek debt crisis, Bini Smaghi offered to leave his post by the end of the year, EU sources in Brussels said, as cited by DPA.

The appointment of 63-year-old Draghi as ECB president is part of a series of changes in leadership at the Frankfurt-based bank.

They include a new member on the executive board, which runs the ECB's day-to-day affairs to replace Bini Smaghi.

In addition, the bank's 23-member governing council, which includes the national central bank chiefs of the 17-member eurozone, has two new members.

The Dutch government is expected to announce shortly the replacement for Nout Wellink, who is due step down this month as head of the nation's central bank.

Germany's Jens Weidmann has just taken up his seat on the governing council after his appointment to head up Germany's influential Bundesbank.

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