Draghi as ECB chief ‘bad for Ireland’

THE appointment of Mario Draghi as European Central Bank (ECB) president could spell bad news for Irish homeowners.

Mr Draghi has been tipped to become the next president of the ECB following the surprise resignation of Axel Weber from the German Central Bank earlier this year. Up to the point of Mr Weber’s resignation he was seen as the front-runner for the top bank job.

Director of the Irish Mortgage Corporation, Frank Conway, said that Mr Draghi will need to be seen to be more “German” than the Germans, and this would spell bad news for mortgage holders here in Ireland.

“With 80% of mortgage holders here susceptible to movements in the ECB base-rate of interest, the weapon of choice for the control of inflation could be used more frequently.

“Mortgage holders here should prepare for the arrival of this very capable Italian central banker and keep their fingers crossed that he will not make spaghetti of our personal finances,” he said.

Mr Draghi’s chances of succeeding Jean Claude Trichet were given a major boost following the endorsement of President Sarkozy of France earlier this year.

“Mr Draghi has also been a hawk when it comes to fighting inflation, the core remit of the ECB.

“In this respect, Mr Draghi is likely to find willing ears and some support in Germany which has been less than enthusiastic of the euro project in recent months,” said Mr Conway.

He said some sections of German society openly question the apparent lacklustre approach by some governments to rein in sovereign debt and scale back on spending, a concern which was reinforced following the bailout of southerners Greece and Portugal.

Mr Draghi was appointed Governor of the Bank of Italy on December 29, 2005. He served as professor of economics at the University of Florence from 1981 to 1991.

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