Content area
Full Text
The first president of the European central bank is a tall, chain-smoking Dutchman with craggy features, tousled white hair, and a reputation for monetary orthodoxy.
Wim Duisenberg, the sixty-threeyear-old former Dutch finance minister who spent fifteen years as head of the Netherlands' central bank, has been in the ECB job for six months; but during the feverish preparations for the launch of the euro on January 1, 1999, it no doubt felt at times like six years.
Apart from the daunting technical challenge of ensuring a smooth transition to the single currency, Mr. Duisenberg has faced political pressures from centerleft governments in Europe-notably in Germany-to cut interest rates in order to bolster employment and growth.
At times, the sparring between the unelected central bankers at the ECB and the elected politicians led by Oskar Lafontaine, the mercurial German finance minister, threatened to get out of hand; but in November, Mr. Duisenberg produced a powerful counterblow-a coordinated interest rate cut among the eleven future members of the euro zone.
Ten of the eleven central banks cut their interest rates to 3 percent, which they said would be the benchmark rate in the euro zone "for the foreseeable future." Only Italy-where Antonio Fazio, central bank governor, is still waging a personal campaign to stamp out inflationary tendencies-- failed to go the whole way. But by January 1, all eleven founder EMU...