European Parliament endorses Draghi as Central Bank President

The European Parliament formally endorsed Italy's Mario Draghi to be the next president of the European Central Bank today.

European Union leaders are expected to give their formal backing to the appointment at a summit on today or tomorrow, allowing Draghi, 63, to take over as head of the bank when Jean-Claude Trichet steps down at the end of October.

French officials have expressed concerns that Italy will have two members on the ECB's executive board once Draghi becomes president. Lorenzo Bini Smaghi is already on the six-member panel, which sets interest rates along with the 17 other euro zone central bank governors.

France has suggested Bini Smaghi could move to replace Draghi as head of the Italian central bank, opening the way for a French appointment to the ECB executive board.

In April, Italian Prime Minister Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield Bini Smaghi's place on the ECB board to a French candidate, in return for France's backing of Italy's Mario Draghi for president.

However, Berlusconi had not first consulted Bini Smaghi, whose eight-year term at the ECB does not end until May 2013.

Bini Smaghi, who had hoped in vain to be offered Draghi's top job at the Bank of Italy, has refused to quit, leaving Berlusconi with egg on his face and delivering a rare slap in the face to France.

While Draghi, a highly respected economist and banker, has won widespread backing for his candidacy in recent weeks, there were concerns earlier in the process that his nationality and past employment with Goldman Sachs could hinder his pathway to Europe's top central banking job.

In appearances before the European Parliament's finance committee, Draghi made clear that his role at Goldman Sachs between 2002 and 2005 did not involve selling financial instruments but was largely an advisory position.

He has also underlined his experience in overseeing Europe's Financial Stability Board, and emphasized the common thinking he shares with Trichet on monetary policy and on the risks to the financial system of a failure to tackle Greece's debt crisis.