Will Trichet's charm protect the euro?

By Quentin Sommerville BBC News Europe Business reporter

Trichet: Not dour like Duisenberg

He may be French, but Jean-Claude Trichet has already promised that the last thing he will do as President of the European Central Bank (ECB) is behave like a Frenchman.

"I'm not here as a Frenchman. I don't want to say that I'll say anything as a Frenchman. I'll say things as president of the ECB," he told the Economic and Monetary Affairs Committee of the European Parliament.

That declaration was more of a renunciation of bad economic habits than an abandonment of nationality.

Mr Trichet will take responsibility on Monday for protecting the value of the euro, the single currency that nestles in the pockets of 300 million Europeans.

But the euro's new guardian takes over at a time when France, along with Germany, is heading for its third year of breaching the very rules designed to underpin the currency's stability.

Backing

Both Germany and France want the rules of growth and stability pact, which limit budget deficits to 3%, more "flexibly" interpreted.

WIM DUISENBERG The architect of the euro

But Mr Trichet is unlikely to concur.

Europe, he says, has been bold and courageous in creating a single currency without the backing of a federal government.

Without one, the basis of the euro's credibility is the stability and growth pact, and that cannot be compromised.

President Jacques Chirac, for one, already knows that he can expect few political favours from the independently minded former governor of the Bank of France.

In the mid-1990s, Mr Chirac, then presidential candidate, criticised Mr Trichet for keeping interests rates too high, and hurting French growth.

Mr Trichet was dubbed "the ayatollah of the strong franc".

Not enough

With Europe's economic recovery taking longer than expected, Mr Trichet could find himself facing the same pressure again.

His predecessor, Wim Duisenberg, cut interest rates in the 12 euro countries to their lowest level since the Second World War.

But critics say the slowdown in the eurozone would not have been so severe if he had cut rates sooner and more aggressively.

As Mr Duisenberg departed, he again warned finance ministers to stick to the strict budget limits of the stability and growth pact.

Flamboyant

So will Mr Trichet be any different?

Much has been made of the Frenchman's savior-faire.

In presentational style, he is expected to be far removed from the dour Mr Duisenberg.

But on issues of substantive economic policy, there is likely to be little change.

After all, Mr Trichet was part of the internal review team which in May approved the ECB's approach to monetary policy.

That means a focus on inflation - the bank aims to keep it around 2% - rather than the pursuit of growth.

The message so far seems that if Europe's politicians want their economies to grow, then they had better make them more competitive and push forward with structural reform.

Whether French or not, Jean-Claude Trichet will be determinedly independent.