Mario Draghi is about to become the world's second most powerful central banker.
The job as president of the European Central Bank is unofficially his after German chancellor Angela Merkel finally gave the Italian her blessing. Germany was the last holdout among the euro zone's Big Four economies. France, Spain and, of course, Italy, had all supported Mr. Draghi's candidacy.
"I know Mario Draghi," she told Germany's Die Ziet newspaper in an interview published Wednesday. "He's a very interesting and experience person. He's very close to our ideas of the stability culture and solid economic policy. Germany could support his candidacy for the office of the ECB president."
Mr. Draghi, who is governor of Italy's central bank, seemed to have the cards stacked against him from the onset because he is a former Goldman Sachs banker on a continent that thinks Goldman is too clever for comfort, and because he is a native of a country with an unenviable history of inflation. Germans have a cultural aversion to inflation and, evidently, Ms. Merkel initially feared she could not endorse Mr. Draghi.
But Mr. Draghi made it clear that inflation-busting would be his priority. The lack of credible rival candidates also helped him. He became the frontrunner three months ago, when Germany's top candidate, Alex Weber, pulled out of the race to succeed the ECB's Jean-Claude Trichet. Mr. Weber was then president of Germany's central bank (the Bundesbank). His retreat disappointed Ms. Merkel because it left her with no other high-profile German banker to endorse.
Mr. Draghi's appointment is now a mere formality. He has to be endorsed by the European Union finance ministers, then by the EU leaders at their June summit in Brussels. Mr. Trichet leaves the ECB in the autumn, after an eight-year term.
The Italian will step into one of the most challenging economic and monetary jobs on the planet. Three EU countries -- Greece, Ireland, Portugal -- have been bailed, and Greece may require a second bailout as its recession deepens and its bond yields rise to unsustainable levels. The ECB has advised Greece not to restructure its debts, for fear it would trigger another banking crisis. Under Mr. Draghi, the ECB might have to reverse its stance as a Greek default, followed by a restructuring, appears all but inevitable.
He will also have to fight rising inflation in the euro zone. No central banker likes to hike interest rates when economies are wobbly. Mr. Draghi's honeymoon could be short lived.
Eric Reguly