The latest 2:35 PM: German Chancellor Angela Merkel may have just approved Draghi as her candidate to replace Jean-Claude Trichet as the president of the ECB, according to German tabloid Bild (via forexlive).Whether she got any concessions of the deal is unknown. We’ll let you know if we get further confirmation.
German Chancellor Angela Merkel is not yet ready to acquiesce over the consensus pick to takeover the ECB presidency, Mario Draghi.
Draghi, an Italian ex-Goldmanite, is already experiencing a caustic response from Germany’s tabloid press, according to Der Spiegel. In the popular daily Bild, Draghi has been called “the man of the lira,” the currency with, “an infinite amount of zeros,” and accused of being involved with the Greek debt scandal while at Goldman Sachs.
Merkel, who’s political position continues to crumble, will demand sincere concessions to agree to Draghi’s appointment. Those may be, according to Der Spiegel:
- Germany gets even more power at the ECB, with chief economist Jürgen Stark having a “prominent role”
- The new eurozone bailout fund, the ESM, is amended so that Germany is not required to spend more than it wants to on future bailouts
No details on what that later agreement would look like, but it could be a hard cap on the ESM level, so that it is not modifiable in the future, or some sort of agreement that the German parliament would have veto rights on the ESM.
It’s pretty clear with the populist press already inflamed over Draghi that Merkel will need to negotiate some sort of grand concession to halt the continued slide of her popularity.