| Euro Innocent |
23 June 2003
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Trichet's Acquittal Ends Duisenburg Years
Jean-Claude Trichet was acquitted last week of charges stemming from the spectacular collapse of French bank Credit Lyonnais -- which lost so much money that Wall Street wags has taken to calling it Debit Lyonnais. This cleared the way for him to take over as head of the European Central Bank, as part of a deal France and the rest of Europe made some years ago. Wim Duisenburg, the current chairman, will leave before his 8-year term is up, an under-appreciated man.
Mr. Trichet was a government official when Credit Lyonnais blew up, and the jury rightly decided that he had been taken in by the lies of management. Before anti-French Americans chime in, recall how two different administrations let Enron happen. He is a popular fellow with the moneymen in Europe, good in both French and English, almost glamorous (for a banker, anyway). Yet as an inflation hawk, he will ensure the euro stays stable.
Unfortunately, this means Mr. Duisenburg is getting the media brush off. A duller man that Mr. Trichet, he is often accused of being too opaque at the wrong times, and his management of the deflation risk has been called into question.
However, he is the only man in Europe who could have made the euro launch a success. A man from a small but stable country who was not flashy enough to be noticed provided no surprises, just dull sameness. How else could the Deutsche-mark been surrendered by the Germans? Mr. Duisenburg succeeded in the euro's rise, fall and rise against the dollar by being a boring Dutch banker. Anything else would have been trouble.