October 23, 2011 / 10:07 PM / 8 years ago

Berlusconi urges Bini Smaghi not to worsen ties with France

PARIS (Reuters) - Italian Prime Minister Silvio Berlusconi urged ECB Executive Board member Lorenzo Bini Smaghi on Sunday to resign his post soon to stop relations between France and Italy souring further, but admitted he was powerless to force him.

Berlusconi said French President Nicolas Sarkozy had expressed his exasperation during an EU leaders summit on Sunday that Bini Smaghi had not yet departed his post to make room for a Frenchman on the six-man board which runs the European Central Bank’s day to day affairs, as the two governments had agreed.

“I’m sure that Bini Smaghi will realize that he cannot be the causus belli of a relationship that is worsening between us and France and that he will quit by the end of the year, as it was agreed,” Berlusconi told reporters after the summit, where his government came under intense pressure from EU partners to step up the pace of fiscal and economic reforms.

“Sarkozy has started to get annoyed ... At a certain point I said to Sarkozy, ‘But what am I supposed to do? Kill him?’”

Under a deal in April, the French leader gave his support for Bank of Italy Governor Mario Draghi to take over the presidency of the ECB from Jean-Claude Trichet in November, provided that Bini Smaghi would make way to ensure a Frenchman remained on the board.

Berlusconi’s government, however, this month offered Draghi’s post at the Bank of Italy to Ignazio Visco, its third highest official, confounding expectations that he would lure Bini Smaghi there from the ECB.

The Italian premier defended his actions, saying Bini Smaghi had been offered other alternatives, but he had declined them.

Bini Smaghi, whose term at the ECB expires in 2013, has insisted that any attempt to force him to leave would be an attack on the central bank’s independence, and he has received the backing of the institution.

“We appealed to his sense of responsibility not to create a scandal between France and Italy, but he has been indifferent,” Berlusconi said.

Reporting By Daniel Flynn and Francesco Guarascio, editing by Mike Peacock

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