Wim Duisenberg has demonstrated a thick skin as president of the European Central Bank.

Rarely has a central banker have been so strongly criticised as the 65 year old Dutchman in the first months of this year. The ECB's refusal to lower its main lending rate in the face of the US economic downturn from the 4.75 per cent set last October prompted adverse comments from the US Treasury, the International Monetary Fund, the Organisation for Economic Cooperation and Development and the finance ministers of Belgium and Austria.

Nor has Mr Duisenberg's tough line on interest rates been his only brush with controversy since he took over the ECB presidency in June 1998, some seven months before the launch of the euro in 11 (now 12) member states of the European Union.

Last October, he was at the centre of a storm following a newspaper interview in which he broke the central bankers' code of silence to discuss in public the conditions under which the ECB might intervene in currency markets to support the euro. The euro, which was the object of a rare joint support operation on foreign exchange markets some weeks before, fell sharply, prompting some officials to wonder privately whether the former Dutch central banker was the right man for the job.

There is no doubt that the tall, craggy, chain smoking Mr Duisenberg has one of the most challenging tasks in the EU. He has the difficult task of establishing credibility for a young institution and a fledgling currency that, uniquely in world monetary history, have been set up by independent sovereign states, which retain control over their own fiscal policies.

The circumstances of his appointment were far from propitious. At a special summit in May 1998, the EU's leaders squabbled into the early hours after France's president Jacques Chirac pressed the nomination of Jean-Claude Trichet, the governor of the Bank of France. To this day, Mr Duisenberg's standing has been weakened by uncertainties surrounding the compromise with which the Brussels summit ended.

The understanding that emerged from the meeting was that Mr Duisenberg would step down from his eight year term some time in 2002 after the introduction of euro notes and coins. But, crucially, nothing has been seen in writing to confirm this. The exact timing of Mr Duisenberg's departure was left in his hands to preserve the idea that his departure will be a voluntary act. But the lack of clarity has encouraged rumour and speculation about his future which is sure to continue as 2002 draws near.

On the other hand, Mr Duisenberg has left no-one in any doubt as to where he stands on policy matters. He has proved a doughty fighter for ECB independence. He has also interpreted the ECB's duty of providing price stability in the euro-zone strictly, conscious that the bank must fight for its credibility.

He won significant backing for his strong anti-inflation stance at the recent April informal meeting of EU finance ministers in the Swedish port city of Malmo. His arguments - pointing to inflation continuing above the ECB's target ceiling of 2 per cent this year and the likelihood that growth would exceed the ECB's estimate of the euro-zone's long-term potential for non-inflationary growth ranging from 2.0 to 2.5 per cent per year - highlighted his intellectual upbringing as an economist. His economic background and long experience as a national central bank governor underpin his authority inside the ECB's Frankfurt headquarters.

Until President Chirac's intervention at the May 1998 Brussels summit, it was generally assumed that Mr Duisenberg would be a shoo-in as the first ECB president. He took over as president of the European Monetary Institute, the ECB's forerunner in Frankfurt, in 1997 after 15 years as president of the Netherlands central bank.

He moved to the Dutch central bank as an executive director in 1981 after a relatively brief interval on the board of a large commercial bank. Between 1973 and 1977, as the youthful finance minister in a Social Democratic government, he was known as the JFK of the Netherlands because of his wide grin and wavy hair. The hair, now a wild, white mop, has remained a Duisenberg trade mark.

Mr Duisenberg can be stubborn. He is proud. A straight talker, he at times lacks the diplomatic skills one might expect of Europe's premier central banker. He is also not immune from the stumbles in verbal nuance that can beset even the most fluent non-native English speakers.

Mr Duisenberg's comment, "You might say that I hear, but I do not listen", uttered earlier this year when asked why he had not followed the US Federal Reserve and cut interest rates, triggered outrage because of its apparent arrogance. It will be long remembered - whether or not his policy judgement proves right or wrong.

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