The president of the

European Central Bank

,

Wim Duisenberg

, has been widely presented as a strong man with a firm hand on the tiller as the good ship "Euro" is launched on the high seas of international finance.

But Duisenberg, who as governor of the

Dutch Central Bank

did little more than copy the

Bundesbank's

every move, is already showing that his newfound power and autonomy may be too much for him. Instead of a judicious, rock-like figure, Duisenberg appears confused and even duplicitous. In short, not the right sort of qualities at all for the first

"Captain Euro".

On the very day of the launch of the euro, he made a statement to the French newspaper

Le Monde

that by any normal standard must be judged incompatible with a promise he made last May when he accepted his new job. He announced on New Year's Eve that he had no intention of resigning halfway through his term.

On May 2, 1998, by contrast, he had issued the following statement:

I would like to thank you for the honor of appointing me as president of the ECB. I have explained to the president of the European Council that, given my age, I will not stay in office until the end of my term. I intend to stay at least sufficiently long to complete the arrangements planned for the transition period leading to the introduction of euro bank notes and coins and to the withdrawal from circulation of national notes and coins. It is a personal decision, taken entirely and totally of my own accord and without pressure from anyone, which has led me to decide not to stay in office for the full term. By the same token, my decision to resign will be a personal decision. This must be clearly understood.

Recall that on that day back in May, the heads of state and government of the 11 EMU countries sat down to lunch at midday in order to appoint a president for their new ECB. They did not rise from the "lunch" for some 10 hours, when the appointment was announced and Duisenberg's statement released. France had until then opposed his appointment because it was claimed that the original architects of the Maastricht treaty,

President Mitterrand

and

Chancellor Kohl

, had agreed that if the bank was to be sited in Germany, then its president should be French.

The circumstances and the timing made it impossible to believe Duisenberg when he said that he did not act under pressure. It was obvious that his implicit undertaking to leave office in 2002 -- the year when the euro notes and coins come into circulation -- was the

quid pro quo

for France abandoning her veto against his appointment, even if the statement did not actually contain an absolutely explicit promise to do so.

This was certainly how it was universally interpreted at the time. The French stated that the agreement was that Duisenberg would leave after four years to be replaced by Jean-Claude Trichet, the present governor of the

Bank of France

. This position was reaffirmed, incidentally, by French Finance Minister Dominique Strauss-Kahn, speaking at the press conference in Brussels on New Year's Eve. Sitting on the same platform as Duisenberg, he said, "I expect promises made at the time to be kept," referring to the May pledge.

The deal was also interpreted in this way all over Germany. Numerous German politicians roundly attacked it in May as a sellout to France. It was criticized by Gerhard Schroeder, then in opposition; by the chairman of the Five Wise Men who advise the German chancellor on economic policy; by the prime minister of Bavaria; and by the president of the

Federation of German Industry

, Hans-Olaf Henkel. It was also attacked by numerous German national newspapers.

It was highly piquant, therefore, that Duisenberg chose the very day of the euro's birth to tell the French that he had no intention of keeping his word. "Will you leave your post after four years as the French said you would when you were appointed?"

Le Monde

asked. "I would have preferred you not to ask this question," Duisenberg replied. "The answer is no."

During the Brussels press conference on New Year's Eve, he reaffirmed his refusal to resign and stonewalled all further questions with an unprofessional "No comment." Are these the communication skills we'd expect from a senior central banker?

No doubt if Duisenberg did condescend to answer questions, he would claim that he had not made an explicit promise to leave after four years. This is what

Bill Clinton

would call "legally correct."

In reality, however, either Duisenberg deceived the French at the time, giving them the impression that he would resign by crafting a form of words that would later enable him to pretend that no such undertaking had ever been made. Or he has deceived the general European public by saying one thing in May and its very opposite in December. Either way, he has been dishonest. Under such conditions, it is difficult to see how Europeans -- or anyone else -- can be expected to have confidence in his administration of the new currency.

To be sure, this is not the first time the euro project has been stained by such double-dealing. In April, for instance, the Bundesbank issued a 20-page report denouncing the inadequate economic preparations for EMU, especially Euroland's high debt levels and budget deficits. It went on to predict that a majority of countries would be unable to fulfill the terms of the stability and growth pact (i.e. the agreement on keeping budget deficits low) in the medium term. Yet the Bundesbank gave the project the green light all the same and we have heard nothing of these concerns since.

But investors who inhabit the real world of economic fundamentals will immediately recognize that all this is nothing but the logic of Humpty Dumpty in

Alice Through the Looking Glass

.

"'When I use a word,' Humpty Dumpty said in a rather scornful tone, 'it means just what I choose it to mean -- neither more nor less.'

"'The question is,' said Alice, 'whether you can make words mean so many different things.'

"'The question is,' said Humpty Dumpty, 'which is to be Master -- that's all.'"

John Laughland is the London-based author of The Death of Politics: France Under Mitterand and, most recently, The Tainted Source: The Undemocratic Origins of the European Idea. He is also European director of the European Foundation, and contributes to The Wall Street Journal Europe, The Financial Times and the Times of London.