MAASTRICHT, NETHERLANDS - European Central Bank President Wim Duisenberg announced Thursday he will step down in 2003, three years before the end of his eight-year term. <br>
<br>
The decision appears to be in line with a 1998 agreement between European leaders that Duisenberg would leave partway through his term to give France another chance to push its own candidate for the job. <br>
<br>
France had pushed unsuccessfully to have the head of its central bank, Jean-Claude Trichet, installed in the top job. <br>
<br>
Duisenberg will be turning 68 on July 9, 2003, the day his resignation take effect, said ECB spokeswoman Regina Schueller. <br>
<br>
``In view of his age, he did not want to serve the full eight-year term as the president of the ECB, which commenced June 1, 1998,'' Schueller said. <br>
<br>
Duisenberg informed the governing bodies of the ECB - the European equivalent of the U.S. Federal Reserve - of his decision in writing on Wednesday, Schueller said. He was expected to give more information later Thursday at the meeting of the ECB governing council, which left key interest rates unchanged 3.25 percent. <br>
<br>
When he took office, Duisenberg has said he would likely not serve his entire term. More recently he had been coy about his intentions, fanning speculation that he might insist on seeing out the full term. <br>
<br>
``It's a good situation because it creates certainty for all the parties involved,'' said Michael Schubert, an economist at Commerzbank in Frankfurt. ``France now has certainty about when he will leave.'' <br>
<br>
Asked what the chance was that a successor would be French, Schubert said, ``I think it's more than 50 percent.'' <br>
<br>
Duisenberg, a former Dutch finance minister and former head of the Dutch central bank, oversaw the introduction of the euro notes and coins, a monumental logistical job that was accomplished without major problems in the first weeks after Jan. 1. <br>
<br>
The cash introduction will end Feb. 28, when the last of the national currencies cease to be legal tender, completing a process that began with the 1992 Maastricht treaty setting up the monetary union. <br>
<br>
In his tenure as head of the bank, Duisenberg has sometimes been criticized for giving signals that have been misread about the bank's actions. For instance, in wake of the Sept. 11 terror attacks, he said that a quick rate cut would give the impression of ``panic.'' The bank then carried out a sharp half-point interest rate cut a few days later. <br>
<br>
Under Duisenberg, the bank has also been criticized by investors and politicians for being too slow to cut interest rates and spur a slowing European economy. Duisenberg repeatedly stressed that the Maastricht treaty that set up the bank required it to fight inflation as its first priority. Interest rate cuts, while they can stimulate growth, can also fuel higher prices.
