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Italy aims to retain its influence within the European Central Bank by proposing Piero Cipollone, a senior official from the Bank of Italy, as its chosen candidate to join the top decision-making body of the eurozone’s monetary authority.
According to three sources familiar with the matter, Cipollone is the preferred choice of the Italian government to replace Fabio Panetta, an executive board member of the ECB who is expected to become the head of the Bank of Italy later this year.
However, the formal nomination of Cipollone by Giancarlo Giorgetti, Italy’s finance minister, is still pending. Other member states of the eurozone might also present their own candidates, even though there is a convention that grants one seat on the ECB’s board to each of the four largest economies in the eurozone.
If successfully nominated, Italy would have two representatives, Cipollone and Panetta, in the ECB’s governing council responsible for setting interest rates. However, the council’s members are expected to prioritize the interests of the overall eurozone rather than their national affiliations.
Italy’s prime minister, Giorgia Meloni, has frequently criticized the central bank’s aggressive approach towards raising borrowing costs, asserting that its simplistic methods to combat inflation could harm European economies. On the other hand, Panetta is known for being one of the more cautious members of the council who supports a more restrained approach to rate hikes.
Cipollone, one of the deputy governors at the Bank of Italy, is viewed by analysts as a strong contender, although some senior Italian financiers consider him to be uninspiring and relatively unknown outside of the central bank.
Panetta’s departure from the ECB’s executive board leaves only three members with economics training, making it imperative for his successor to possess a background in economics. Cipollone meets this criterion, having studied economics at La Sapienza University in Rome and Stanford University in California, and served as a visiting scholar at the University of California, Berkeley.
In addition to his economic expertise, Cipollone has experience in payments, having previously worked in the balance of payments office and later overseeing currency circulation and accounting at the Bank of Italy. This experience could prove valuable as he would likely assume responsibility for the ECB’s plan to introduce a digital euro, which was previously overseen by Panetta.
However, there have been conflicts between Italy and Brussels regarding the acceptance of digital payments for transactions under €60, a proposal that was eventually abandoned last year.
There is a possibility that Italy might face competition from smaller eurozone countries that have never had a top executive in the Frankfurt-based institution. Spain, for example, went without representation on the ECB board for six years until Luis de Guindos was appointed as vice-president in 2018.
“Cipollone is not only a skilled economist but also possesses extensive knowledge beyond monetary policy,” said Lorenzo Codogno, a former senior Italian treasury official who currently works as an economic consultant in London. “He has the potential to excel at the ECB, but it ultimately depends on the other candidates and whether Italy will be allowed to fill the position.”
There is also pressure from the European Parliament to appoint a woman to enhance diversity within the ECB’s governing council, which currently consists of 26 members, of which only two are women. Any appointment requires consultation with the Parliament and the ECB, as well as approval from EU leaders.
After leaving the Bank of Italy in 2007, Cipollone served as an executive at the Invalsi education research institute before becoming the World Bank executive overseeing several countries. He rejoined the central bank in 2014 and briefly served as an economic adviser to former prime minister Giuseppe Conte.
This vacancy in the eurozone’s interest rate-setting authority arose due to the decision to transfer Panetta from the ECB board to Rome when Ignazio Visco’s term ends at the beginning of November. Both the Italian government and the ECB declined to comment on the matter.
Additional reporting by Sam Fleming in Brussels and Amy Kazmin in Rome
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