Former Goldman Sachs Vice President and current Bank of Italy governor Mario Draghi now has the backing of French President Nicolas Sarkozy in his quest to become the next President of the ECB.While he now seems the likely successor to Jean-Claude Trichet at the ECB, there are a few factors that may endanger an easy rise to power.
Draghi was formerly a vice president at Goldman Sachs from 2002-2005. He has denied any role in the financial shenanigans that helped Greece hide its dire debt position, but his links to Goldman likely won’t go over well with certain parts of the European banking community.
Being Italian, Draghi is also open to criticism from Europe’s northern countries, as his home country is one of the PIIGS. His election would also make the ECB’s one and two from PIIGS members, with Portugal’s Vítor Manuel Ribeiro Constâncio the current vice-president.
As we’ve said before, it all comes down to German Chancellor Angela Merkel. If she can stomach the political fallout from picking an Italian ex-Goldmanite to run the ECB, it will be an easy choice. But considering her difficult political situation, we’re sure she’s still scrambling to find another option.