MILAN: Italian Central Bank Governor Mario Draghi may be the favorite to head the European Central Bank after Germany's Axel Weber withdrew from the race, but experts say he still needs to convince Berlin. “His chances have improved but it's not in the bag yet,” Marco Valli, an economist at Italian banking giant UniCredit, said, as the Jesuit-educated economist stepped up his campaign to take the top post in Frankfurt. A columnist for the Financial Times daily was bullish this week, saying: “The ECB needs Draghi.” And The Economist said: “The next president of the world's second-most-important central bank should be Mario Draghi.” The likelihood of seeing a German at the helm of the ECB seems slim-to-none after Weber said he was stepping down as president of the German central bank, to be replaced by Jens Weidmann, economic adviser to Chancellor Angela Merkel. Other candidates mooted recently are Germany's Klaus Regling, who chairs the European Financial Stability Facility (EFSF), the head of Luxembourg's central bank Yves Mersch and Erkki Liikanen of the Bank of Finland. But Mersch's nomination is “almost impossible,” according to Luxembourg's Finance Minister Luc Frieden. Klaus Regling is considered inexperienced in monetary matters and Finland has said Liikanen is not a candidate. The way therefore seems clear for Draghi, who experts say has by far the strongest record to succeed Frenchman Jean-Claude Trichet in October. Head of the Italian Tresury from 1991 to 2001, 63-year old Draghi worked at Goldman Sachs and has led the Bank of Italy from 2006, restoring its reputation after former governor Antonio Fazio resigned amid a banking scandal. He is renowned for his seriousness, his diplomatic nature and discreet ways. The former economics professor's role as head of the Financial Stability Board (FSB), overseeing new financial regulation in the wake of the global economic crisis. also earned him points on the international stage. Italian Economy Minister Giulio Tremonti said this month he fully supported Draghi's “excellent” bid, adding that he was “highly qualified” for the job. But experts believe the race is by no means decided despite such endorsements. “As so often in Europe, filling a top-job vacancy does not always simply mean finding the best person for the job. National interests also matter,” said Carsten Brzeski from Dutch bank ING. Julian Callow from Britain's Barclays Capital said: “Much will depend upon the calculations being made by German Chancellor Merkel and her advisors.” Despite his reputation as a moderate hawk, Draghi will have to work hard to win over Germany, where the hyper-inflation of the 1920s is still very much part of the collective memory, and persuade northern members of the eurozone to elect a southern candidate. The ECB usually maintains a balance between northern and southern Europe for the top two posts and the vice-president post is currently held by Portuguese Vitor Constancio. “Who should manage the legacy of the good and stable Deutschmark. A man of the lire!,” the Bild daily said in March 2010.
