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Thursday, 7 February, 2002, 13:29 GMT
Duisenberg to quit ECB
Wim Duisenberg at the launch of the euro
The launch of euro notes - a Duisenberg triumph
Wim Duisenberg, the Dutch president of the European Central Bank, is to resign next year.

The date chosen - 9 July - is Mr Duisenberg's 68th birthday.

Though in an afternoon speech he said he would stay on longer if it would help his, as yet, unchosen successor.

Jean-Claude Trichet
Jean-Claude Trichet: preferred successor?
The decision brings to an end months of speculation about how long Mr Duisenberg would stay in the 12-nation eurozone's top economic job.

When the ECB was constituted in 1998, a backroom deal was said to have been struck which would see Mr Duisenberg step down half-way through his eight-year term, to be replaced by the number two contender, France's Jean-Claude Trichet.

But it is not yet clear whether Mr Trichet, who is currently under investigation over his role in scandals at French bank Credit Lyonnais, is still the preferred successor.

Age concern

Mr Duisenberg, a former Dutch finance minister, is thought to have got the job after France and Germany were unable to agree on a candidate.

The announcement comes in the wake of the successful introduction of euro notes and coins on 1 January.

Duisenberg's career
Born 1935
IMF 1965-1969
Dutch finance minister 1973-1977
Head of Dutch central bank 1982-1997
Head of ECB 1998-2003
Mr Duisenberg had made it clear that he wanted to oversee the landmark changeover, but there were also some indications that he could chose to stay on longer and complete his term.

In a statement, the ECB said the decision to quit fitted with his declaration in May 1998 that "in view of his age" he did not want to serve a full term.

Mr Duisenberg was expected to give more information about his decision later on Thursday at the meeting of the ECB governing council in Maastricht.

At their meeting, the governors opted to leave eurozone rates unchanged, at 3.25%.

Criticism

Mr Duisenberg's leadership - especially where interest rates are concerned - often came under fire.

He was sometimes criticised for giving the markets misleading signals about the bank's actions.

ECB headquarters
The ECB faces criticism for interest rate inaction
Following the 11 September attacks, for example, he said that a quick rate cut would give the impression of panic, but then cut rates sharply a few days later.

He was also criticised for having a backward looking policy and not acting quickly enough in cutting rates in order to boost the economy when it begun to slow.

Mr Duisenberg argued that inflation had to come down before cutting rates in order to justify notably less aggressive cuts than his counterparts in the UK and US.

He also made some controversial remarks about the euro in the early stages of monetary union.

Markets unfazed

Markets remained largely calm after the news.

Although Mr Duisenberg was unpopular to begin with, he had gradually been gaining credibility.

And the announcement has given plenty of time to find a successor.

One trader noted that by leaving it until the middle of next year he has given Mr Trichet time to clear his name.

"It could be slightly good news for the currency because it means stability at least until the middle of next year," said Cyril Beuzit at BNP Paribas.

 WATCH/LISTEN
 ON THIS STORY
Ken Watrett, eurozone economist at Paribas
"It has been quite a troublesome presidency for Mr Duisenberg"
Wim Duisenberg, President of the ECB
"We all have the tangible proof of monetary union now in our pockets"
Thomas Knippe, Handelsblatt
"It is not good for the ECB to become subject to backdoor dealings."
See also:

07 Feb 02 | Business
Eurozone interest rates unchanged
07 Feb 02 | Business
Wim Duisenberg's legacy
03 Jan 02 | Business
The euro's next challenges
06 Dec 01 | Business
ECB holds rates steady
21 Oct 01 | Business
Soros lashes out at ECB
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