The Germans could not realistically be given the presidency of the European Central Bank, and they know it. They may not have been the euro's most enthusiastic proponents but once the project was agreed they were going to make sure Europe got it right, which meant doing it the German way, a la Bundesbank.
The search was on for a clone of Bundesbank president Hans Tiet meyer and they did not have far to look. The man then at the helm of the Dutch Central Bank, now the president of the European Monetary Institute - the ECB's precursor - Mr Willem Frederik Duisenberg, had a powerful track record.
Mr Wim Duisenberg (62), a tall easygoing man with a shock of white hair and well-worn features, combined lengthy experience as a central bank governor with previous political experience as Minister for Finance. Like most Dutch middle-class people, he speaks several languages fluently. He was just the man and would have been a shoo-in had President Chirac not decided that French national honour was at stake.
Born on July 9th, 1935, in Hee renveen in the dairy country of Friesland, Mr Duisenberg has been immersed in the world of finance from his student days. After qualifying in economics at the University of Groningen in northern Netherlands, he joined the International Monetary Fund in Washington for a three-year stint in 1965. He returned to Europe in 1969 to act as an adviser to the Nederland sche Bank, the Dutch Central Bank. He entered politics as a Laour Party candidate. In 1973 he served in the first left-led government in many years. Like his contemporary Finance Ministers, he responded to the oil crisis with traditional Keynesian pump-priming, pushing up state spending from 48 per cent of GDP to 55 per cent between 1972 and 1975. His popularity with the party suffered, however, when the 1975 recession began to bite and he tried to put spending into reverse.
That process, as the conservative government elected in 1977 discovered, was by no means easy and the Dutch would not rein in state spending until the early 1980s.
He resigned from parliament in 1978 to join the board of Rabo bank. In 1981 he moved to the Nederlandsche Bank, becoming its chairman in 1982. In 15 years at the helm, Duisenberg showed he was poacher turned gamekeeper.
A year later the devaluation of the guilder during the European Monetary System realignment by prime minister, Mr Ruud Lubbers, horrified him, and he insisted successfully on the hard-guilder policy which effectively made the currency a surrogate of the mark, virtually locking it into an informal currency union. In the 1993 ERM crisis, the guilder alone held firm and the Dutch were allowed to preserve a narrow fluctuation band against the German mark. He was appointed to replace Mr Alexander Lamfalussy as head of the European Monetary Institute, the Frankfurt-based body charged with the technical preparations for monetary union, at the Dublin summit in December. Most ministers and bankers expected him to see through the seamless transition of the institute into the ECB this summer and take over as the latter's president, but there's many a slip between cup and lip and the Mr Chirac made sure it would not be a one-horse race.
Mr Duisenberg is also president of the Bank for International Settlements based in Basel and an IMF governor.
