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Monday, 15 April, 2002, 09:30 GMT 10:30 UK
Greek to be Europe's number two banker
Parthenon, Athens, Greece
Mr Papademos helped Greece into the euro zone
Greek central banker Lucas Papademos, the hot favourite for the job, has been appointed vice president of the European Central Bank.

The choice would have been unthinkable a decade ago, given Greece's record of high inflation and interest rates, huge deficits and massive external debt.

Mr Papademos, however, is credited with turning the country's economy around in preparation for its membership of the euro.

He takes over in May from France's Christian Noyer as second in command of the ECB, which watches over economic policy for the 12-member eurozone.

With friends like these

The decision, the first time a senior ECB executive post has fallen vacant since its creation four years ago, was made by European Union finance ministers at the regular Ecofin summit in Spain.

Two more posts, including the top job, will be up for grabs in 2003 as Dutch president Wim Duisenberg and Finnish board member Sirkka Hamalainen step down.

Bank of Greece governor Lucas Papademos
Mr Papademos' appointment sparked a row with Belgium
The competition to succeed Mr Duisenberg is certain to be fierce, and the French - citing a supposed "gentlemen's agreement" before the ECB's creation - say they have a right to supply his successor.

Only 14 of the 15 EU finance ministers voted for Mr Papdemos; Belgium abstained, meaning further talks are necessary.

As one of six small countries with no representation on the six-member ECB board, Belgium was upset to have its candidate, academic Paul de Grauwe, overlooked.

And the accidental posting of news of the appointment to the ECB's website ahead of the official announcement also proved controversial.

Another Enron?

Among other items high on the Ecofin agenda were the ramifications of the Enron scandal gripping corporate America, amid worries that a similar crisis could easily occur in Europe.

"The European Union needs to take steps to prevent something similar occurring here," said Frits Bolkestein, Europe's internal market commissioner.

In response, the meeting decided to ask an existing expert group on company law to report on the collapse of the US energy company amid allegations of false accounting on a massive scale.

The group, ministers said, needed to examine both companies' internal and external reporting and controls, and how investment analysts examine and rate the corporations they cover.

 WATCH/LISTEN
 ON THIS STORY
Doctor David Howarth, University of London
"This sort of haggling is inevitable"
See also:

14 Apr 02 | Business
Belgian dissent mars ECB vote
10 Apr 02 | Business
Greek banker eyes European job
26 Mar 02 | Sci/Tech
EU flies flag in cyberspace
07 Mar 02 | Business
Eurozone interest rates kept on hold
13 Feb 02 | Business
Succession scramble at ECB
08 Feb 02 | Business
New ECB chief 'must be French'
07 Feb 02 | Business
Duisenberg to quit ECB
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