European Union leaders appointed Italy's Mario Draghi as the next president of the European Central Bank today - a move that gives investors much-needed certainty over who will lead the institution in its pivotal role in the fight against the crippling debt crisis.
The timing of Draghi's appointment had come under doubt as fellow Italian executive board member Lorenzo Bini Smaghi had until today refused to leave his post.
But German Chancellor Angela Merkel said today that Bini Smaghi would stand down from the board.
If Bini Smaghi stayed on the executive board, France would not have a representative on the six-person board once current ECB chief Jean-Claude Trichet departs on October 31. The French had previously implied they would only support Draghi if a Frenchman or woman takes Bini Smaghi's spot.
The European Parliament and the ECB board had already given their approve to Draghi's appointment.
Delaying his appointment until their next summit in September would have underlined divisions among EU leaders, who have already struggled to find a common line on debt-stricken Greece and the best way of containing the financial crisis that has also pushed Ireland and Portugal into needing massive bail-outs.
The ECB has played a central role during the debt crisis that has afflicted the 17-country euro zone over the past 18 months or so. For example, Trichet overrode criticism from some of the more hawkish officials at the bank when he backed a multibillion euro bond-buying programme intended to ease the pressure on the more indebted countries.
More recently, the ECB has found itself in the difficult position of raising interest rates to keep a lid on above-target inflation levels even though the weaker euro zone economies remain weak.
