July 25, 2019 / 9:28 AM / 23 days ago

In new spat with League, Italy's economy minister opposes central bank reform

FILE PHOTO: Italian Economy Minister Giovanni Tria attends a eurozone finance ministers meeting in Brussels, Belgium July 8, 2019. REUTERS/Francois Lenoir/File Photo

ROME (Reuters) - Italian Economy Minister Giovanni Tria said on Thursday he saw no reason to change the procedures currently used to name the five board members of the country’s central bank, opposing reform plans drawn up by the ruling coalition.

The remarks are likely to cause a new tussle within Italy’s fractious government over the management of the central bank and other key economic decisions, as the euroskeptic administration begins talks over next year’s budget.

“I do not see the need to change the current system,” Giovanni Tria, a technocrat not linked to Italy’s ruling parties, said in an interview with Italian Catholic newspaper Avvenire, when asked about a plan devised by the ruling coalition that would increase political control over the appointment of the central bank’s management.

Under the draft bill, prepared by the far-right League and backed by coalition partners 5-Star, three board members, including the governor and his deputy, would be named by the prime minister and the other two by parliament.

Currently, the government only has the main say in naming the governor, who is appointed through a complicated procedure which requires consultation with the central bank’s main internal body, known as its “superior council”.

The other board members are named by the superior council and then rubber-stamped by the government.

The move comes on the heels of another proposal from the League to clarify the legal ownership of the gold held by the central bank, a move that critics sees as a way to allow the ruling coalition to potentially sell the gold to fix Italy’s public finance problems.

Tria said the proposed changes to the central bank’s management, which need to be approved by the Italian Parliament, were not outstanding as the choice of the governor was already subject to a political decision.

“However, I think there are other priorities,” Tria added.

Reporting by Francesco Guarascio @fraguarascio; Editing by Crispian Balmer and Catherine Evans

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