Wim Duisenberg has finally shown his hand. He has set a firm date for his departure as president of the European Central Bank - July 9, 2003 - and thereby provided for an orderly transition to his successor.
The assumption is that Jean-Claude Trichet, governor of the Bank of France, will take over the top ECB post. But Mr Trichet remains under investigation for his role in the Crédit Lyonnais affair.
As director of the French treasury a decade ago, he was ultimately responsible for supervising CL, the rogue bank which lost millions of dollars in the late 1980s and early 1990s. Despite many rumours, Mr Trichet has yet to be exonerated.
Mr Duisenberg's decision to leave in July 2003 leaves plenty of time for the French investigating magistrates to give Mr Trichet a clean bill of health or otherwise. By contrast, if Mr Trichet were to move prematurely from Paris to Frankfurt and a scandal were to emerge, the ECB's credibility would be severely damaged.
Mr Trichet, a quintessential French civil servant whose intellectual brilliance is matched by a fair degree of political cunning, has many supporters. He speaks excellent English and is adept at communicating to the financial markets - a skill which the bluntly-spoken Mr Duisenberg has still to master.
Moreover, Mr Trichet's record as an anti-inflation fighter in France is are impeccable. He was one of the architects of the "franc fort" policy which helped France to withstand speculative attacks in the mid-1990s. Though the policy came at the price of high unemployment, it helped to prepare the ground for France’s entry into the single currency in 1999.
Mr Duisenberg's announcement ends the uncertainty which began on the very day he assumed office almost four years ago, following an acrimonious dispute between France and Germany over the choice of ECB president.
Mr Duisenberg, a Dutchman who was very close to the Bundesbank, was the first choice of the Germans. Jacques Chirac, French president, wanted a Frenchman, partly for prestige and partly to prevent the impression that the new European Central Bank would be under German domination.
Initial reaction in the financial markets on Thursday suggested that Mr Duisenberg had compromised the ECB's statutory independence by leaving ahead of his eight-year term. But this response fails to grasp the nature of the political deal which EU leaders struck in the early hours of the morning in May 1998.
Under the deal, Mr Duisenberg - under considerable pressure from Mr Chirac - was forced to agree to step down at some point after the transition to the euro was complete, most likely in mid-2002.
As part of the bargain, the governments of the then 11 founder members of the economic and monetary union offered a political commitment to back Mr Trichet as his successor.
The timing of Mr Duisenberg's departure remained therefore in his own hands in order to preserve the notion that his retirement would be a voluntary act.
In the event, by choosing July 9, 2003 - his 68th birthday - as the date of his departure, Mr Duisenberg has prolonged his stay in office by 12 months longer than many initially assumed.
After a shaky start, when he occasionally spoke too bluntly for the taste of the financial markets, Mr Duisenberg has done a sound job in Frankfurt. The ECB has slowly acquired credibility and the euro has been an outstanding technical success, whatever the doubts about its weakness against the dollar.
Mr Duisenberg's announcement is a thumb in the eye for President Chirac who pressed him four years ago to give a firm date for his departure. Mr Chirac suggested spring 2002, with a view to being able to unveil his French successor ahead of the legislative and presidential election in April and June.
On the other hand, Mr Chirac has little interest in re-opening the battle that he began four years ago. This way, France seems assured that it has prior claim on the top job, whatever the fate of Mr Trichet at the hand of the magistrates.
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