ROME (Reuters) - Italy’s new Economy Minister Fabrizio Saccomanni is a 70-year-old central banker virtually unknown to the general public, who should reassure financial markets and the rest of Europe that the country will not stray from fiscal orthodoxy.
He has spent most of the last 46 years at the Bank of Italy, where he is deputy governor, having been passed over for the top job when Mario Draghi left in 2011 to head the European Central Bank.
Few can doubt Saccomanni’s knowledge of economics and finance, but without any party affiliation he may lack the political clout to push through unpopular policies and risks being caught in the crossfire of cabinet infighting.
Draghi pushed for his deputy to replace him when he left the Bank of Italy but Saccomanni was opposed by Silvio Berlusconi’s center-right government and compromise candidate Ignazio Visco leapfrogged him in the bank’s hierarchy to become governor.
That was not the first time Saccomanni missed out. In 1998 he was expected to be Italy’s first member of the ECB’s six-member executive board but lost out to Tommaso Padoa-Schioppa, who was more favored by Romano Prodi’s center-left government.
Reserved but amiable, with a dry sense of humor, Saccomanni continues a tradition of technocrats who have made the move from the Bank of Italy to the economy ministry, the most recent examples being Padoa-Schioppa and Carlo Azeglio Ciampi.
He had to overcome the resistance of Berlusconi, a key stakeholder in Prime Minister Enrico Letta’s left-right coalition, who said on Friday that Saccomanni would be an unacceptable appointment.
“We’ve had enough of technocrats, we have been through a government that created a disaster because of its excessive fiscal rigor,” he said, in reference to Mario Monti’s outgoing technocrat administration.
Saccomanni publicly backed Monti’s austerity policies several times, abandoning his usual reserve to take on a role of convincing the press and investors of Italy’s creditworthiness at the height of the euro zone debt crisis in 2011 and 2012.
However the central bank’s forecasts proved far too optimistic on Italy’s growth prospects as the country sank into its longest recession for 20 years.
As economy minister, Saccomanni’s primary task will be to breathe life into the euro zone’s third largest economy with structural reforms and growth-boosting measures without allowing public finances to go off the rails.
One thing the center-right and center-left components in the broad coalition most strongly agree on is that Italy must try to re-negotiate its fiscal targets with Brussels and win more leeway to stimulate the ailing economy.
With his economic experience, international credibility and fluent English, Saccomanni will be well placed to present Italy’s case.
Despite his low public profile he has been well known to the international financial elite for decades. He sits on the board of the Bank for International Settlements in Basel and was one of the behind-the-scenes negotiators who prepared Italy for European Monetary Union in the 1990s.
A native of Rome, he studied economics at Milan’s Bocconi University and later at Princeton University in the United States and joined the banking supervision department of the Bank of Italy in 1967.
He has been at the central bank ever since, excluding stints on secondment to the International Monetary Fund from 1970 to 1975 and as deputy president of the London-based European Bank for Re-construction and Development from 2003-2006.
Saccomanni is married with no children.
Editing by Stephen Powell