FRANKFURT -- Being head of Europe's new central bank is not a job for wimps.
, president of the
European Central Bank
, tough enough for the post?
In the past few months, the first Mr. Euro has had the unenviable task of herding the 11 nations participating in the European monetary union toward the launch of the single currency on Jan. 1.
And along the way, he has had to contend with a stock-market plunge, a global economic slowdown and clamoring among left-wing European politicians for rate cuts.
In his gruff, to-the-point manner -- and with plenty of support from intransigent
-- Duisenberg has stood firm.
But unfortunately for the hirsute Dutchman, the demands and pressures of his job -- already intense -- will no doubt grow in coming months.
Standing tough against politicians is only one aspect of the job. Vision, leadership and plain old common sense are also requirements for success. Some have called economic and monetary union the riskiest monetary experiment ever, and it is up to Duisenberg to nurture the infant ECB and steer a steady course in its early years.
Stefan Bergheim, economist at
in Frankfurt, says, "He is under tremendous pressure, drawing criticism from all sides. I wouldn't want his job. But he is almost the perfect man to lead us through this."
Bergheim noted that the ECB presidency is all the more difficult because there is no ECB history, no ECB statistical base and no ECB staff with years of experience to draw upon.
Duisenberg, 63, was anointed for the ECB presidency a couple of years ago by former German Chancellor
, who until his electoral defeat in September was the EMU's de facto kingmaker.
A friend of Bundesbankers and with hawkish monetary credentials earned as president of the Dutch central bank, Duisenberg also was widely supported for the posting by Tietmeyer and the business and banking elite of Germany. It would have been politically impossible for Tietmeyer -- or any German, for that matter -- to win the ECB presidency.
But in one of the greatest political minidramas ever, Duisenberg nearly missed his chance for greatness. The French, seldom without their hands in the political cookie jar, stunned the EU by nominating one of their own --
Bank of France
-- for the ECB presidency. And what was supposed to be a public celebration of EMU in May in Brussels turned into a public-relations nightmare.
With all EMU nations holding veto power of the choice, French President
held firm in his choice during hours of intense backroom negotiating. Finally, late in the night a compromise was reached: Duisenberg would step down halfway through his eight-year term and Trichet would assume the ECB presidency.
A Dutch European Commission official in Brussels told
recently that if the French had vetoed Duisenberg, the Dutch -- extremely sensitive to past political defeats by the French for international postings -- would have vetoed Trichet. "We probably would have ended up with an Italian or Spaniard as ECB president," the official said.
Duisenberg, an avid golfer with a home in France, began his adult life as an academic -- Dr. Duisenberg, if you will. After earning his Ph.D. in 1965, he joined the staff of the
International Monetary Fund
in Washington, where he spent four years, then did a stint teaching macroeconomics at the
University of Amsterdam
Hard to believe, but Duisenberg was a blazing socialist back then. He was named finance minister in 1973, just in time for the 1970s oil-price shocks, and was a member of the government that oversaw huge increases in Dutch welfare spending and a ballooning deficit.
Later, he apparently repented his transgressions. After switching to the Dutch central bank in 1981, he converted to orthodox Bundesbank monetarism. He locked the Dutch guilder to the mark and Dutch key rates to Bundesbank rates. He started preaching against the sins of deficit spending, and his sermons haven't changed since.
The Dutch EU official in Brussels says Duisenberg is known to be extremely intelligent. Others familiar with Duisenberg's work thus far at the ECB say he is deliberate, but decisive. And he said to be very precise.
But some outside observers warn that Duisenberg -- cocksure in his beliefs and not keen to compromise -- might have to lighten up in his new role. He must be more flexible, they say, in his approach as leader of a central bank representing 11 nations, including the so-called Club Med nations of southern Europe. Some wonder whether Duisenberg is capable of flexibility after years of slavish subservience to the Bundesbank party line.
Certainly there are some early indications that he may be rising fast to this shepherding role. It was he who helped steer all the euro nations to a dramatic coordinated rate cut Dec. 3.
On Jan. 1, the Bundesbank's authority officially dies, and Duisenberg will finally -- officially -- be the boss. He will be more powerful than Tietmeyer and Trichet. He will head a monetary zone as large as the one lorded over by
. And with European economic growth slowing more rapidly than many expected and political tensions certain to heat up, Duisenberg will have only his own instincts to follow.
Not a job for wimps.
This story was originally published on Dec. 9.