Italy staked its claim on Tuesday to the European Central Bank presidency after Jean-Claude Trichet's mandate expires in October 2011, setting the stage for a fight with EU powerhouse Germany.
Italian Foreign Minister Franco Frattini said on local television Italy would be "honoured" if Bank of Italy Governor Mario Draghi were named ECB head, reviving debate over who will succeed France's Trichet.
Draghi's prominent role during the global crisis as chairman of the Financial Stability Board, which spearheads the Group of 20's regulation initiatives, means he is often mentioned as a potential replacement for Trichet, but he faces a likely challenge from German ECB Governing Council member Axel Weber.
"Weber is a strong candidate but the rotation of the presidency could and should mean it's Italy's turn," Frattini told Reuters.
"No one has put a candidacy forward, there has been no talk of a post-Trichet, but it is clear that respected international commentators like the Wall Street Journal are talking about Draghi and of course Italy would look well on that," he said.
Neither Germany nor Italy has had one of its nationals appointed to the top ECB job, with Trichet having taken over from the bank's first chief, Dutchman Wim Duisenberg, in 2003.
Germany's Bundesbank declined to comment on Frattini's support for Draghi over Weber, widely seen at this stage as his main rival for the job.
Draghi, who has held top positions at the World Bank, the Italian Treasury and investment bank Goldman Sachs, has seen his international standing rise further since he was appointed to the FSB in April 2006.
The Bank of Italy said Draghi had no comment to make. In the past he has been quick to rule himself out of positions he did not want. When his name was associated with the presidency of the European Investment Bank, the BOI issued a statement saying he was "not interested in the job".
Officials around the euro zone have told Reuters Draghi is already emerging as the front runner ahead of Weber.
"Of the two, Draghi is the more likely," a senior European Union source said on Monday on condition he not be named.
PRAGMATIST
Draghi, 62, is widely seen as a monetary policy pragmatist, with a less clear-cut profile than Weber, whose public comments have characterised the 52-year-old German as an inflation hawk.
A central bank official said Weber was penalised by the fact the ECB was based in Germany, meaning his appointment would make the Frankfurt-based bank appear overly dominated by the euro zone's largest economy.
"If Draghi wants the job he is extremely likely to get it," this official said.
A French government source was more cautious, saying France had a good relationship with Draghi but was not yet backing any candidate and much could change before the post became vacant.
"It's frankly a bit indecent to be discussing the issue when Trichet still has two years left in the job," the source said.
A former economics professor at several Italian universities, Draghi keeps a low public profile but is considered a skilful political operator who has successfully navigated through Italy's frequent changes of government.
He spearheaded a privatisation drive as director general of Italy's Treasury in the 1990s before moving to the private sector as a managing director of Goldman Sachs. A fluent English speaker and a direct communicator, he enjoys a strong reputation on financial markets.
"He has a stronger economic background than Trichet … he is a candidate who by himself could guarantee as high an international weight to the ECB as we have had under Trichet if not even higher," said Unicredit Chief Economist Marco Annunziata.
"One thing he could bring is probably a quicker response time to what we have seen from the ECB over the past 10 years and… in times of crisis a quicker response time can be vital."
POLITICAL DECISION
Karel Lanoo, chief executive of the Brussels-based Centre of European Policy Studies, said it would be hard for anyone to argue against Draghi.
"Other possible candidates, such as (outgoing vice-president) Lucas Papademos or Axel Weber are seen as either lacking Draghi's reputation or are too young," he said.
However, David Marsh, the author of a recent book on power battles surrounding the euro's launch, stressed Trichet's succession will be a political decision which could well see Germany prevail.
"Germany's enhanced weight in Europe and the way it is recovering quite impressively from recession will give (Chancellor) Angela Merkel greater confidence to stick up for Weber," he said.
On the other hand "Italy's reduced international standing under (Prime Minister Silvio) Berlusconi doesn't help Draghi's candidature."
