May 6, 2011 / 12:48 PM / 9 years ago

UPDATE 1-Merkel opposes Draghi as next ECB chief-magazine

* Spiegel said Merkel opposes Draghi ECB bid

* Cites Italy’s poor debt record

* No comment on Paris saying German minister backs Draghi

(Adds quotes, French minister comment, background)

By Stephen Brown

BERLIN, May 6 (Reuters) - German Chancellor Angela Merkel opposes Mario Draghi’s candidacy to lead the ECB because of Italy’s poor record on debt, magazine Der Spiegel said on Friday — a move which would put her at odds with euro zone peers.

Hours after France’s finance minister said her German peer Wolfgang Schaeuble backed the Italian central banker for the ECB presidency — as does Paris — the well-connected Der Spiegel reported what looked like a toughening of negotiating positions.

Berlin was widely understood to have dropped the idea of it being Germany’s turn to chair the Frankfurt-based ECB when Axel Weber, the Bundesbank chief and main German candidate, said in February he would quit the German central bank and ECB contest.

Draghi, the respected head of the Financial Stability Board who spent time at the Italian treasury and at the investment bank Goldman Sachs, then emerged as the favourite and won the outright support of French President Nicolas Sarkozy last week.

But Draghi’s bid to succeed Jean-Claude Trichet still needs German endorsement and Berlin has been dragging its heels, with Der Spiegel reporting last week that the conservative chancellor was holding out for concessions in return for backing Draghi.

The magazine said in its last edition that she wants Germans to be appointed to two top European financial positions as well as getting more concessions on the permanent euro zone bailout fund, the European Stability Mechanism (ESM).

In a preview of its upcoming edition, Der Spiegel appeared to reflect a harder line from the chancellor, saying she would block his candidacy rather than just being hesitant about it.

“Merkel rates Draghi as a professional but would block him as ECB chief because she is worried that having a representative of highly indebted Italy as the supreme guardian of the euro would not convince Germans,” wrote the magazine.


Earlier on Friday, the German finance ministry said it could not confirm French Finance Minister Christine Lagarde’s comments that Schaeuble did support Draghi for the ECB presidency.

“My colleague Wolfgang Schaeuble is in favour of this nomination and considers that he presents every quality needed to make a good ECB president,” Lagarde told a television show, adding: “Merkel said she would give her opinion in June, I hope we will know a little earlier.”

Merkel’s chief spokesman declined to comment on the Der Spiegel report.

While she has faced some resistance in Germany to Draghi’s candidacy, Handelsblatt business daily last month quoted a senior Berlin official as saying Schaeuble backed Draghi and the mass-circulation Bild daily reported that Merkel had given up the search for a German contender.

Bild, which despite its brash headlines is taken seriously by politicians because of its mass readership, went as far as to call the reserved Draghi “the most German” candidate, alongside a photo montage of him wearing a Prussian spiked helmet.

Der Spiegel’s latest story also said Merkel thought Draghi should instead be considered as next head of the International Monetary Fund to replace Frenchman Dominique Strauss-Kahn.

This could just be a put-down for the reported aspirations of Paris to have another French official installed at the Fund in Washington, with Lagarde mentioned as as possible candidate.

Additional reporting by Christian Ruettger and Eric Kelsey

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