RPT-MNI INTERVIEW: Italian Should Replace Coeure, Rossi Says

By Silvia Marchetti

     ROME (MNI) - The Bank of Italy's Senior Deputy Governor Fabio Panetta is

the best candidate to take over as head of the European Central Bank's Market

Operations Unit and as an ECB executive board member when Benoit Coeure departs

in December, leaving an opening which should go to an Italian, Panetta's

predecessor at the BOI Salvatore Rossi told MNI.

     While conceding that Italy has no automatic right to an Executive Board

seat to replace the one it will lose when Mario Draghi's term as president

expires at the end of October, Rossi noted that such an appointment would be in

line with previous practice. Panetta would be a better fit for the role than

Bank of Italy governor Ignazio Visco, he added in an interview last week.

     Panetta was granted a fresh term at the BOI this year by Italy's ruling

coalition and was then promoted to senior deputy governor in May, succeeding

Rossi, whose six-year mandate had come to a close. Panetta is now Visco's

second-in-command and chairs the BOI-supervised IVASS insurance authority. He is

also a member of the ECB's bank supervision arm.

     "I believe Visco is overqualified for the board, given he's already a

member of the Governing Council. Deputy Governor Fabio Panetta, on the other

hand, has a high level technical profile and a great background within the

Single Supervisory Mechanism."

     Panetta's two decades of experience include accompanying not only Visco but

also his two predecessors Antonio Fazio and Mario Draghi at ECB meetings, Rossi

noted.

     "There is no written rule that grants Italy an ECB executive board

membership, it's more of a practice that all big countries have a seat. So we

need to see first if Italy does get one, which I am confident it will, as it has

been so far, or else the European system would be sending out a quite negative

message."

     Draghi's imminent departure will leave Italy without representation after

Rome failed to secure any top EU job following the European parliamentary vote,

while tensions simmer with Brussels over fiscal targets.

     "It would be appropriate that Italy's new board member be appointed when

Benoit Coeure's mandate expires in December," and that the Market Operations

Unit be assigned to Italy, Rossi said. Rome should not run the risk of delay and

having to wait for future seats to become vacant, he added. Luxembourg's Yves

Mersch's term ends in December 2020 while Germany's Sabine Lautenschlaeger

departs in January 2022.

     Italy's government is expected to designate a potential successor to Coeure

in coming months but any figure picked by premier Giuseppe Conte would need be

vetted by the Eurogroup and the EU Council following consultation with the

European parliament and the ECB Governing Council.

     Rossi praised the job done by outgoing President Draghi, remembered

particularly for his "whatever it takes" commitment to save the eurozone in

2012. He is set to be replaced by former International Monetary Fund chief and

French finance minister Christine Lagarde.

     "Draghi has done a remarkable job these past eight years in coordinating

and building consensus inside the Governing Council even when it came down to

taking bold decisions," Rossi said.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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