Amid a whirlwind of financial and policy shifts, Italy is set to stand its ground in the European Central Bank’s (ECB) influential circles.
With the proposition of senior Bank of Italy official, Piero Cipollone, as its candidate for a spot on the ECB’s decision-making panel, Italy hopes to maintain its influence over the bloc’s monetary matters.
Italy’s strategic play
Inside sources reveal that Cipollone is the Italian government’s preferred candidate to succeed Fabio Panetta on the ECB executive board. Panetta is gearing up to assume the reins of the Bank of Italy later this year, leaving an influential position vacant on the ECB’s board.
Though Giancarlo Giorgetti, the country’s finance minister, has yet to officially nominate Cipollone, his appointment would adhere to an unspoken understanding that the four largest economies in the eurozone each hold a seat on the six-member ECB board.
Such a nomination, if successful, would uphold Italy’s two votes on the ECB’s rate-setting governing council.
Despite the ECB’s insistence that nationalities should not influence decision-making, maintaining Italian representation is seen as critical by Prime Minister Giorgia Meloni.
Meloni, a vocal critic of the central bank’s approach to hiking borrowing costs, recently dubbed their “simplistic” anti-inflation measures as potentially harmful to European economies.
Candidate’s profile and potential impact
Cipollone, a deputy governor at the Bank of Italy, is considered a stable choice by analysts despite some dubbing him as a less well-known figure outside his home institution.
The upcoming departure of Panetta from the ECB board, which will result in the loss of one of only three members with economics training, makes it essential that his successor possesses a similar background.
In this regard, Cipollone checks all the boxes, boasting an impressive academic background in economics from Rome’s La Sapienza University and Stanford University, including a stint as a visiting scholar at the University of California, Berkeley.
Cipollone’s career trajectory at the Bank of Italy, where he gained experience in payments, places him in good stead to potentially oversee the ECB’s ambitious plan to introduce a digital euro.
However, Italy’s recent contention with Brussels over its scuppered plans to allow merchants to refuse digital payments for transactions under €60, casts a slight shadow on the digital euro project.
Further challenges could also arise from smaller eurozone nations that have yet to secure top executive positions at the Frankfurt-based institution.
What’s next for Italy and ECB
Observers are closely watching the unfolding situation. Lorenzo Codogno, an economic consultant and former senior Italian treasury official, praises Cipollone’s broad knowledge, but remains cautious, noting that the final outcome depends on the other candidates and whether Italy will be allowed to fill the position.
Moreover, there’s a pressing demand for improved diversity at the ECB, with the European Parliament possibly advocating for a female candidate. Any appointment will require EU leaders’ approval after consultation with the parliament and the ECB.
Cipollone, who held an advisory role to former Prime Minister Giuseppe Conte and an executive role at the World Bank, will be stepping into a vacancy created by Panetta’s planned shift to Rome from the ECB board this November.
As Italy continues to maneuver these shifting sands, the outcome remains as much a test for the country as it does for the evolving landscape of the ECB’s leadership.
