Financial Times
June 14, 2011
Mario Draghi has strongly defended the tough stance against a Greek debt restructuring taken by the European Central Bank, which he hopes to head from November, and says Athens’ economic challenges are not as great as those faced by his native Italy in the 1990s.
Giving evidence to the European parliament in support of his appointment, Mr Draghi stuck closely to the position set out by Jean-Claude Trichet, the ECB’s incumbent president, demanding that politicians excluded plans for involving private investors in a fresh bail-out for Greece that included any element of compulsion.
In a hearing lasting more than two hours, Mr Draghi also clashed with European parliamentarians on his previous career at Goldman Sachs. In an often combative performance, he insisted the ECB would put its task of tackling inflation above all other objectives – and stressed his role as an architect of Europe’s economic integration.
Afterwards, the former Italian civil servant and economics professor admitted it was his “first experience of democratic accountability ... it was one of the greatest learning experiences I have ever had”.
His nomination as the next ECB president followed the withdrawal from the race this year of Berlin’s preferred candidate, Axel Weber, then president of Germany’s Bundesbank.
It was the ECB’s responsibility, Mr Draghi insisted, to point out the costs of a Greek default, which would result from any attempt to impose costs on private sector investors. “We have to be pragmatic ... We could have a chain of contagion,” he said.
Neither would a default resolve Greece’s underlying problems, he added.
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