Hard-liner Trichet takes ECB chair

AT the age of 60, Jean-Claude Trichet is about to climb the final two flights of stairs in a career that earlier this year could have ended on the pavement.

Members of the European Parliament yesterday approved his choice as successor to Wim Duisenberg as head of the European Central Bank, which sets monetary policy and interest rates for the 12 nations that have adopted the euro as their currency.

So on 1 November, Trichet will walk up from his modest office on the 33rd floor of the ECB tower in Frankfurt to the chairman's suite on the 35th floor. Trichet, Governor of the Bank of France, has been a member of the ECB board since 1998 when a political fix gave Duisenberg the chairman's seat on condition he made way for a French successor at mid-term.

Trichet, the monetary hard-liner, was the obvious successor until January, when he went on trial for complicity in falsifying the accounts of Crédit Lyonnais a decade ago when it was owned by the French State. But the one-time French Treasury director was cleared by the High Court in July. and has since been preparing the final move in a flawless 40-year government finance career.

For the top ECB job is no sinecure, as Duisenberg knows to his cost. The Dutchman managed to keep the lid on eurozone inflation for four years but no one could offer him any plaudits for Europe's economic stagnation. The charge that the ECB failed to cut interest rates fast enough to stimulate growth sits heavy on him.

Will Trichet play it any better? When it comes to monetary policy and interest rates, he is arch-orthodox. Like Duisenberg, he believes stability and low inflation are what Europe needs. But where Duisenberg seemed bumbling, Trichet shines. Suave and smart, and a favourite among the Continent's central bankers, he certainly weighs his words before he speaks. But he doesn't hesitate to speak his mind when pressed.

A week ago, Trichet criticised the French government for breaching the eurozone stability and growth pact. By borrowing more than 3% of gross domestic product to balance their budgets (as France and Germany are), 'we act against growth and against job creation because we lose more in confidence than we eventually gain,' he said.