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ECB President to Step Down in July 2003 - 2002-02-08

Wim Duisenberg, the president of the European Central Bank, has announced Thursday that he will step down in July 2003, paving the way for France to nominate one of its own citizens to succeed him at the helm of Europe's most important monetary institution. Mr. Duisenberg will be remembered as the man who shepherded the European single currency into existence.

The tall craggy Dutchman with a penchant for straight talk ended months of speculation about his departure, indicating that he would leave the bank on his 68th birthday.

Mr. Duisenberg says he decided to announce his retirement more than a year in advance because uncertainty about a smooth transition was clouding the image of the bank and the stability of the euro, the single currency whose introduction he oversaw at the beginning of this year.

His most likely successor is Jean-Claude Trichet, the governor of the Bank of France. But there is one obstacle to Mr. Trichet assuming the job. The French banker is under investigation for his role in the near failure of Credit Lyonnais Bank a decade ago, when he headed the French treasury.

Still, the next head of the European Central Bank is almost certain to be a Frenchman. That is because a 1998 agreement among European Union leaders established that Mr. Duisenberg would leave part-way through his eight-year term and that Mr. Trichet would replace him. If Mr. Trichet is unable to take the job, the French government has lined up several other candidates.

Mr. Duisenberg gets good marks from European bankers for supervising the debut of euro notes and coins on January 1 throughout the 12-nation euro-zone without major problems. It was the biggest currency change in modern history.

But, as analyst Joerg Kraemer of Invesco Asset Management in Frankfurt points out, the white-haired former Dutch finance minister was criticized frequently in financial markets for lacking a sense of public relations. "Duisenberg did a good job as far as monetary policy by itself is concerned," he said, "but he did a poor job as far as communicating with the market is concerned... And I expect a successor, perhaps we get Trichet - he is likely to do a better job as far as communication is concerned."

A French diplomat at the European Union says his government welcomes news of Mr. Duisenberg's departure date because it ends uncertainty on European financial markets.

The European Central Bank left its key interest rate unchanged at 3.25 percent Thursday. Mr. Duisenberg hinted he wants to assess the strength of Europe's economic recovery before taking any action. The bank has not changed its benchmark rate since November, when it lowered it by half a percentage point.