Silvio Berlusconi’s appointment of Ignazio Visco to run the Bank of Italy may cause a rift with French President Nicolas Sarkozy, reports Reuters.It was reported yesterday that Berlusconi had appointed Visco to run the bank after Mario Draghi was foisted into the role of head of the European Central Bank.
However, Sarkozy is angry that Italy now has two representatives on the board of the ECB, while France has none. It is reported that Sarkozy was expecting Lorenzo Bini Smaghi, who currently sits on the board of the ECB, to be appointed to head up the Bank of Italy.
That appointment would have freed up a spot on the board of the ECB for a French official. Businessweek reports that Berlusconi was heavily considering nominating Bini Smaghi for the Bank of Italy position. His mind was swayed after meeting with cabinet officials at the last minute.
It is thought that the Bank of Italy demanded an internal promotion and would have been upset if Bini Smaghi had been appointed.
However, Sarkozy had previously given his backing on the appointment of Draghi as head of the ECB based on a promise that France would end up with Bini Smaghi’s seat on the board. Now, with two Italians on the board, the French President may have some words for his Italian counterpart.
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