The nomination of Mario Draghi's successor at the helm of the Bank of Italy caused surprise yesterday as Berlusconi named Ignazio Visco, the current vice- director at the central bank.
The nomination of Mario Draghi’s successor at the helm of the Bank of Italy caused surprise yesterday as Berlusconi named Ignazio Visco, the current vice- director at the central bank.
After long negotiations with members of the government, Berlusconi opted for a candidate who has already widespread approval. The appointment was praised in particular by those wishing for an internal hire as a way to ensure the continuity and autonomy of the institution.
Visco, born in Naples, first arrived at the Bank of Italy in 1974, working his way up to becoming its deputy director in 2007. In the meantime, he built up an international track record that included a five-year stint as the head of the OECD’s economics department.
But his appointment comes as a compromise between the opposition party’s preference for Vincenzo Saccomanni, the current director general at the central bank, and Berlusconi’s favourite Lorenzo Bini Smaghi.
Bini Smaghi, currently on the ECB executive board, was the only candidate the Prime Minister had named openly. Observers suggest Berlusconi wanted to reassure French expectations of a position on the ECB’s board. The possibility of having a French representative on the board persuaded Nicolas Sarkozy to approve Mario Draghi’s appointment as president of the ECB.
The clash over the appointments mirrored the political impasse that has caused trouble for Berlusconi in his efforts to convince the markets he can tame the euro area’s second-biggest debt, and reflects a prolonged internal crisis within the government.
Emma Marcegaglia, president of Italy’s largest business association, welcomed the nomination of Visco as one “able to guarantee autonomy and independence, values that we have always held as fundamental”. However, Marcegaglia criticised the circumstances surrounding the decision, adding it could have been handled in a better way.
Her words echoed those from the Bank of Italy ‘s Council, which approved the candidate but disliked “the unpleasant handling of the case”.
Raffaele Bonanni, general secretary of workers’ trade union CISL, commented Visco will be a high-profile figure capable of ensuring the continuity of the institution. “We often had the chance to appreciate his sensibility for social issues. He will be able to guide the Bank with the same institutional rigor and analytical insight of his predecessor” he said.
Economists reacted positively to the decision. Mario Monti, former member of the European Parliament and current president of Bocconi University, said Visco is an internationally highly-regarded figure.
However, his appointment was handled “in a regrettable way, because of typical Italian dynamics,” the economist told La7 TV, hinting at the mix of politics and finance in the Bini Smaghi case, which could now spoil Berlusconi’s relations with Sarkozy.
Economist Giacomo Vaciago, professor at the Catholic University of Milan, added that Visco represents the best option among all proposed candidates, having build a reputation as an established specialist among international circuits and the most appreciated collaborator of Draghi.