Lorenzo Bini Smaghi has the European Central Bank’s lawyers on his side. He is under pressure from Nicolas Sarkozy to step down as ECB executive board member. The French president argues that when Mario Draghi takes over as ECB president next week, there will be too many Italians on the board.
But Silvio Berlusconi, Italy’s prime minister, has yet to find a suitable alternative job for his compatriot (the Italian central bank governorship has gone to Ignazio Visco, its third-in-command). He has tried appeals to patriotism, without any apparent effect on Mr Bini Smaghi. “What should I do, should I kill him?” Mr Berlusonci said he told Mr Sarkozy in Brussels at the weekend.
Italy’s Corriere della Sera newspaper reports today that an internal legal ECB legal opinion, which I understand was reported faithfully, makes clear that a departure of an executive board member cannot be tied to the arrival of another. The danger would be of the ECB’s political independence being undermined. Any job move would have to be justified by reasons other than a politician’s whim – in other words, it would have to be to a position of sufficient status.
The opinion explains why Mr Bini Smaghi’s colleagues in Frankfurt, including Jean-Claude Trichet, the departing president, are urging him to stand firm and not weaken the ECB at a critical moment in the eurozone debt crisis. The fear would be of setting a precedent that undermined the ECB’s credibility as well as its freedom from political interference.