Mario Draghi has been nominated as the successor of Jean-Claude Trichet as head of the European Central Bank (ECB). The 63-year old sees himself faced with the challenge of stabilizing the euro zone post-crisis and reconciling the growing and stagnating countries of the union when he takes over the post in November.
 
Draghi is expected to raise interest rates again as soon as January 2012. The current ECB brought rates up to 1.25% last month and is expected to up them to 1.5% in July. While the bank brought cheap cash onto the market and bought large amounts of government bonds during and after the crisis, fears about the effects this policy could have on monetary value surfaced. Especially countries whose economies are growing again voiced concerns about keeping the ECB in `crisis mode’ for too long.
 
Inflation in the Eurozone was high at 2.8% last month. As a result of the measures taken during the crisis, the banks funds have more than doubled to € 1.9 trillion.
 
Draghi is expected to adapt a tight-money strategy, much welcomed by growing economies like Germany or Belgium. While German Chancellor lauded Draghi for his commitment to stability and solid economic policy, Belgium Central Banker Coene said that `markets were anticipating a gradual withdrawal of the monetary accommodation’.
 
Meanwhile, countries like Greece, Ireland and Portugal are still in recession. If economic growth should slow down in the euro zone later this year, unemployment rates, already high at 9.9%, are expected to rise further.