EU internal watchdog investigates Draghi

The European Union’s internal watchdog has launched an investigation of European Central Bank president Mario Draghi following a complaint of conflict of interest, the institution’s spokeswoman said.

Corporate Europe Observatory, which tracks EU-focused lobbying, accused Draghi in June of lacking independence because of his membership in an international forum of public and private sector financial leaders, the Group of Thirty (G30).

“We received a complaint and sent a letter to the ECB,” said Gundi Gadesmann, spokeswoman for EU ombudsman Nikiforos Diamandouros. “Now we are waiting for a reply.”

The ECB has until the end of October to reply, she said.

An ECB spokeswoman confirmed that the ECB had received a notification from the ombudsman and that it would respond within the given time.

She rejected allegations that there was a conflict of interest.

Corporate Europe Observatory has argued that Draghi’s involvement in the G30 contravenes the central bank’s ethics rules.

“Draghi is alleged to maintain close ties with the group and to participate in closed meetings,” the transparency group said last month.

“(G30) bears all the characteristics of a lobbying vehicle for big international private banks and the president of the European Central Bank should not be able to be a member, due to concerns over the bank’s independence,” it said. Chaired by former ECB president Jean-Claude Trichet, the G30 gathers influential regulators, financial executives and academics.

Former Federal Reserve chairman Paul Volcker, Bank of Canada governor Mark Carney and Bank of England Governor Mervyn King are also members.

Draghi himself is under time pressure and faces a crunch week, with ECB policymakers meeting tomorrow to discuss ways to stop a spiralling debt crisis in the eurozone.

The central banker said last week the bank was ready to do whatever it takes to preserve the euro — within its mandate.

However, possible solutions face deep resistance of Germany’s powerful central bank, wary of inflationary pressures and governments easing up on fiscal austerity.

Observers and policymakers say the EU will have to formulate a plan on how to stop the crisis and preserve the euro no later than in September, when a number of crucial events, decisions and deadlines are due.

— Reuters


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