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Thursday 17 October 2019

Draghi denies ECB interfered in row over Makhlouf

Controversy: New Central Bank of Ireland Governor Gabriel Makhlouf. Photo: Vivek Prakash/Bloomberg
Controversy: New Central Bank of Ireland Governor Gabriel Makhlouf. Photo: Vivek Prakash/Bloomberg
Donal O'Donovan

Donal O'Donovan

ECB President Mario Draghi has denied his bank interfered in the appointment of new Central Bank of Ireland Governor Gabriel Makhlouf after a controversy surrounding his handling of a New Zealand budget leak.

In a letter written in response to a query from Sinn Féin MEP Matt Carthy, Mr Draghi said the ECB is not involved in such appointments. "The ECB is not involved in decisions on the appointment of national central bank governors. Such decisions are taken by the relevant national authorities. The governing council welcomed governor Makhlouf at its September meeting and looks forward to working with him."

The 'Irish Times' reported in July that the ECB raised concerns over the appointment - citing contact between former Central Bank governor Philip Lane, now the ECB's chief economist, and Finance Minister Paschal Donohoe. Mr Draghi's short letter made no reference to such a call.

Mr Makhlouf was New Zealand's treasury secretary, the top civil servant in its Department of Finance, until last May. His departure was marred by the findings of a government inquiry there into how he'd failed to take responsibility for the mishandling of a March budget leak.

Mr Donohoe backed Mr Makhlouf to take the job here despite the controversy. He arrives to an ECB increasingly torn over the latest round of quantitative easing, which is seeing resistance among German policy makers in particular. Mr Lane pushed back against those concerns yesterday in New York, defending a policy to spend €20bn a month indefinitely to boost economic demand.

Irish Independent

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