Berlusconi Makes Surprise Pick for Bank of Italy

Ignazio Visco, currently No. 3 official at the bank, was nominated to replace Mario Draghi as bank governor, just days before Mr. Draghi takes over the post of president of the European Central Bank.

The prime minister’s office said the nomination was made in a letter sent to the bank’s Board of Directors, which will meet on Monday to provide a non-binding opinion. President Giorgio Napolitano must formally ratify the appointment before it takes effect.

The decision comes after weeks of stalemate over Mr. Draghi’s successor. Mr. Berlusconi has struggled to assert authority over his increasingly fractious majority in Parliament amid the widening debt crisis that has wracked markets in Europe, with Italy within the crosshairs.

Although Mr. Visco had not been considered to be among the leading candidates for the job, initial reaction to his appointment was positive. Pier Luigi Bersani, leader of the main opposition Democratic Party, said Mr. Visco had the requisite “authoritativeness and autonomy” required to guide the central bank, the Ansa news agency reported.

Mr. Draghi is set to start at the E.C.B. on Nov. 1, taking over from Jean-Claude Trichet.

The selection of Mr. Visco, deputy director general of the bank since 2007, came as somewhat of a surprise after weeks of fervent — and turbulent — petitioning that ended in a three-way deadlock among Lorenzo Bini Smaghi, currently a member of the six-member executive board of the E.C.B.; Fabrizio Saccomanni, the Bank of Italy’s deputy governor; and Vittorio Grilli, director general of the Finance Ministry.

The French President Nicolas Sarkozy had lobbied strongly in favor of Mr. Bini Smaghi, whose appointment would have made room for a French national on the E.C.B. board. Mr. Saccomanni was favored by the Bank of Italy, while Mr. Grilli was backed by Mr. Tremonti, who has clashed recently with Mr. Berlusconi.

As the deadline for nominating a candidate drew closer, criticism over the government’s inability to fill the post went hand in hand with growing doubts over the government’s inability to confront the challenges posed by the debt crisis.

Critics say that the austerity measures passed this summer — meant to balance the budget by 2013 — are insufficient, and while the government pledged last month to quickly present wide-ranging measures to stimulate growth, it has yet to present anything concrete.

In a front-page editorial Thursday in Milan daily Corriere della Sera titled “A masterpiece of a mess,” the editor-in-chief Ferruccio de Bortoli said the delay in appointing the governor was a “glaring demonstration of a lack of leadership and even of national dignity.”

Mr. Visco, 61, rose to his current position from within the bank’s ranks. A native of Naples, he studied economics at the University of Rome and at the University of Pennsylvania, and joined the Bank of Italy in 1972.

Two years later he began working in the bank’s economic research department, becoming its head in 1990. From 1997 to 2002, he was chief economist at the Paris-based Organization for Economic Cooperation and Development and served as the Bank of Italy’s sherpa, or adviser, for Group of Seven and Group of 20 meetings.

Article source: http://www.nytimes.com/2011/10/21/business/global/berlusconi-makes-surprise-pick-for-bank-of-italy.html?partner=rss&emc=rss