-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
By Paul Taylor
PARIS, Oct 5 (Reuters) - The race to succeed European Central Bank President Jean-Claude Trichet is out in the open, pitting a pragmatic Italian against an old-school German inflation hawk, two years before the Frenchman steps down.
Italy's foreign minister fired the starting gun last week by saying Rome would be honoured if its central bank governor, Mario Draghi, 62, was chosen. The other likely contender is German Bundesbank President Axel Weber, 52.
Draghi looks the better choice both on grounds of experience and of outlook.
The next ECB chief, to be picked in early 2011, will steer the euro zone through the treacherous waters of post-crisis recovery and probably preside over the entry of the remaining eight east European EU members, possibly of Iceland, Denmark, Sweden and, who knows, maybe even Britain.
The ECB president is appointed for an eight-year term by a unanimous decision of European Union leaders on the recommendation of their finance ministers. Britain, Sweden and Denmark, which opted out of the single currency, don't vote.
It is a political rather than a solely economic choice. National rivalry is as important as professional credentials or monetary policy views, and there are no public auditions.
That is a pity since Draghi and Weber have contrasting backgrounds and views which offer a real policy choice within the corset of the bank's mandate to ensure price stability.
Both are members of the ECB's governing council, which sets interest rates. Neither has officially declared his candidacy.
The Italian, who heads the recently upgraded Financial Stability Board, has worked in government, investment banking, international institutions and financial regulation.
He studied in Italy and the United States, served at the World Bank, headed the Italian Treasury for a decade, and was an investment banker with Goldman Sachs before succeeding the disgraced Antonio Fazio at the Bank of Italy in 2005.
Draghi rarely speaks out on monetary policy, but when he does he cleaves to the centre ground between hawks such as Weber and ECB executive board member Juergen Stark, and doves like ECB vice-president Lucas Papademos or Cypriot central banker Athanasios Orphanides.
Some northern European governments may have misgivings about appointing a central bank chief from highly indebted Italy, regarded as one of the sick men of Europe.
But Draghi is in a line of Italian public servants such as former European Competition Commissioner Mario Monti who have distinguished themselves in international posts despite their country's weak governance and underperforming economy.
Weber, by contrast, has never worked outside Germany or in the private sector and was an academic monetary economist until he took command of the once-mighty Bundesbank in 2004.
His frequent speeches reflect German inflation-fighting orthodoxy and fiscal conservatism.
Since the financial crisis began, he has argued against setting interest rates too low, warned against any illicit ECB financing of member governments and said that the central bank should not "print money" to combat recession.
When the U.S. Federal Reserve and the Bank of England drove interest rates down towards zero and embarked on quantitative easing by buying government debt, Weber insisted that ECB rates should not go below 1 percent and opposed colleagues who wanted the central bank to buy corporate debt.
"One of the lessons of the past has been that leaving rates too low for too long can contribute to macroeconomic and financial imbalances down the road," he said in April.
Weber advocates a more symmetrical monetary policy under which interest rates could rise quickly and not just fall fast. In June, he said raising rates pre-emptively could be justified even if the mid-term inflation outlook is under control, to head off asset price bubbles.
Such views would put him at loggerheads with politicians in France and elsewhere who fear that high interest rates will choke the economy and raise their debt service costs. (editing by Edited by David Evans)