The 63-year-old is expected to move from Frankfurt to Rome soon.
(Photo: REUTERS)
Frankfurt ECB board member Fabio Panetta is to become the new head of the Italian central bank. The government in Rome agreed on this on Tuesday, as reported by several Italian media. From November, the 63-year-old is to succeed the previous head of the central bank, Ignazio Visco, whose term of office expires at the end of October.
The personnel also has consequences for the European Central Bank (ECB) in Frankfurt. Panetta’s move will vacate his position on the ECB’s Executive Board, the central bank’s six-member governing body. There could be a fight vote on the successor.
Italy is expected to nominate a candidate to succeed Panetta in the coming weeks. According to an unwritten law, the four large euro countries Germany, France, Italy and Spain each have a representative on the board of directors.
However, this regulation has already been deviated from in the past. Spain did not provide a representative from 2012 to 2018.
Some small euro countries could now file claims. For example, there have not yet been any ECB Executive Board members from Eastern European countries such as Estonia, Latvia, Lithuania, Slovakia or Slovenia.
supporters of loose monetary policy
Even after his move to Rome, Fabio Panetta will continue to sit on the ECB Council and help decide on monetary policy there. Along with chief economist Philip Lane, he is considered one of the spokesmen for a loose monetary policy. He said ahead of the Fed’s June meeting that, in his opinion, interest rates had almost peaked and the monetary policy debate would soon shift to the question of how long we wanted to keep interest rates high.
Meloni criticized the ECB’s current rate hike course in the Italian parliament on Wednesday.
(Photo: Reuters)
This attitude could also have earned him sympathy from the Italian Prime Minister Giorgia Meloni. On Wednesday in the Italian parliament, she criticized the ECB’s current course for raising interest rates.
“It’s right to fight inflation with determination, but for many people the ECB’s simple prescription of raising interest rates doesn’t seem like the way to go,” she said. In June, Italy’s inflation rate was 6.4 percent, down from 7.6 percent in May.
Will there be another woman on the ECB Executive Board?
Panetta already knows the Banca d’Italia. From 2012 to May 2019 he was the deputy head of the institute. The Italian enjoys a good professional reputation within the ECB, even if he was clearly in the minority with his positioning for a rather loose monetary policy.
>> Read here: Inflation in the euro zone falls more than expected in May
Within the ECB Board of Directors, Panetta has so far been responsible for the digital euro project. He is also responsible for international relations, banknotes and payments.
Many employees give Panetta credit for having a doctorate in economics. This certainly plays a role in the ECB, which is teeming with well-trained economists and a doctorate from a renowned university is one of the most important status symbols.
There are currently only two other trained economists on the board of directors, chief economist Philip Lane and Isabel Schnabel. This could indicate that the choice falls on an economist.
In addition, only two out of six members are women. In the ECB Governing Council, which is made up of the six Executive Board members and the 20 national central bank governors, the ratio is even lower. Only two of the 26 members there are female.
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