15 April 1998
Issue 1055
Germany set to win 'Mr Euro' battle
By Toby Helm in Brussels and Andrew Gimson in Berlin
GERMANY was believed last night to have won its battle with France over
who should become the first president of the European Central Bank.
Reports surfaced in European Union capitals suggesting that the job
would go to Germany's favoured candidate, the Dutchman Wim Duisenberg.
Such an outcome would be well received on the financial markets where Mr
Duisenberg, a former head of the Dutch central bank, has a reputation as
a German-style hardliner on monetary policy with close links to the Bonn
government.
His appointment as "Mr Euro" would bolster the belief that the new
currency could inherit much of the strength of the mark and the guilder
and hold its own with the dollar and the yen. Well-informed sources said
it appeared that Paris had resigned itself to withdrawing its candidate,
Jean-Claude Trichet, governor of the Bank of France, from the race.
Yesterday both Gerhard Schr”der, the Social Democrat candidate for the
German chancellorship, and Wim Kok, the Dutch Prime Minister, threw
their weight behind Mr Duisenberg as the candidate who they said
represented "strength and stability". On a visit to Holland, Mr Schr”der
described Mr Duisenberg as "somebody whose appointment would be a
positive signal for the financial markets".
Mr Kok said: "Public opinion seems to view Duisenberg increasingly as
the appropriate candidate for the presidency. That's good news for us .
. . above all because of his stability reputation." Mr Duisenberg, who
currently heads the European Monetary Institute, the forerunner of the
European Central Bank, had been seen before last October as a certainty
for what will be one of the most powerful jobs in Europe after the
launch of the single currency on January 1. The Frankfurt-based bank
will run policy on interest rates, exchange rates and the money supply
in the euro area.
But last November France caused dismay in Brussels and anger in Bonn by
putting forward Mr Trichet for the job. Paris maintained that Mr Trichet
was also a "hawk" on monetary policy who had the same Germanic instincts
on the running of monetary policy as Mr Duisenberg.
Before Easter, Jacques Santer, President of the European Commission,
said EU governments should come to a decision as soon as possible to
avoid harming preparations for the euro's launch.
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