EU leaders appointed Italy's Mario Draghi as the next president of the European Central Bank today but it was unclear whether another Italian on the ECB's executive board would step down to smooth the process.
In draft conclusions agreed at a summit in Brussels, EU leaders "appointed Mr Draghi president of the European Central Bank from November 1st 2011 to October 31st 2019."
The 63-year-old economist and banker will replace France's Jean-Claude Trichet, who steps down at the end of October after eight years in the euro zone's top monetary policy post.
French officials had expressed concern in recent weeks about Mr Draghi's appointment as it would have meant two Italians being on the ECB's six-member executive board with no French representation. The other Italian, Lorenzo Bini Smaghi, is not due to leave his eight-year post until May 2013.
In April, Italian prime minister Silvio Berlusconi promised French president Nicolas Sarkozy that Italy would yield Mr Bini Smaghi's place on the board to a French candidate in return for France's backing of Mr Draghi for president.
But that proved problematic, with Mr Bini Smaghi saying he had absolutely no intention of stepping down early.
Some EU sources said that Mr Bini Smaghi had assured EU Council president Herman Van Rompuy and Mr Sarkozy in discussions today that he would relinquish his post in the coming weeks.
"We expect an announcement shortly," one senior EU source said. Another said: "This morning, in the Council, Mr Van Rompuy and the Italians will explain that Mr Bini Smaghi will leave in due time."
However, another source familiar with the situation said Mr Bini Smaghi still believed the outcome would rest with the Italian government, and he would not be pressed into leaving unless the government found him a suitable alternative.
Mr Bini Smaghi wants to avoid any impression that pressure on him could compromise the ECB's independence, and therefore thinks he should only leave his current post for a similar and not inferior position, the source said.
The only job which appears to fit the bill is Mr Draghi's post at the Bank of Italy, which would allow Mr Bini Smaghi to keep a vote on the ECB's Governing Council.
Euro zone sources said the ECB was expected to issue a statement later today, or over the weekend.
While Mr Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent months, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe's top central banking job.
In appearances before the European Parliament's finance committee, Mr Draghi has made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.
He has also underlined his experience in overseeing Europe's Financial Stability Board, and emphasised the common thinking he shares with Mr Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece's debt crisis.
Reuters