Place your bets

Global Finance, Dec 1997/Jan 1998 by Lanchner, David, McTigue, Guthrie

Former Dutch central banker Wim Duisenberg looked like a shoo-in to run the new European Central Bank when he was chosen to head the European Monetary Institute, the ECB's predecessor. But last fall France suddenly began pressing the case for its own central banker, Jean-Claude Trichet. That touched off a blizzard of other nominations for the post-so many, in fact, that the procedure began to take on comic dimensions. By next spring, some speculated, everyone in Europe might be a candidate.

France and Germany are leery lest the other dominate the new Europe. Duisenberg looked like a good compromise, but because he tied the guilder to the Deutschemark years ago, the French view him as a German clone. They sometimes call him "Monsieur Cinq Seconds"-supposedly the length of time it takes him to emulate a Bundesbank policy move.

Everyone is feigning surprise at Trichet's candidacy, but he has angled for the post ever since he was named in 1993 to make the Banque de France truly independent. A cold-eyed technocrat, he is everything Francophobes despise: intellectually arrogant, ambitious-and stubborn.

So Helmut Schmidt, Germany's former chancellor, promptly nominated France's former conservative president Giscard d'Estaing, a move that looked like an attempt to divide French backing for Trichet. Italy's prime minister, Romano Prodi, countered by nominating Bundesbank boss Hans Tietmeyer. Since Tietmeyer says he won't take the job, Prodi's move looked like a clever way to doom Duisenberg (and back Trichet) without offending the Germans. Among other hats in the ring:

Philippe Maystadt, Belgium's former socialist finance minister. He calls rumors of his candidacy "absurdities."

Luxembourg's Jean-Claude Junker, a former prime minister and now EU president. But the price may be too high: In exchange for the ECB post, Luxembourg might have to give up its tax haven advantages.

Spain's former finance minister, Pedro Solbes-Mira, who is line to head the European Bank for Reconstruction and Development when Frenchman Jacques de Larosiere's term ends in 1998. If he went to the ECB instead, might that open up the EBRD post to-a German?

Obviously there's a lot of horse trading ahead.

-David Lanchner and Guthrie McTigue