Sunday, July 31, 2005

Former European Central Bank Chief Dies

Former European Central Bank Chief Dies

PARIS - Wim Duisenberg, the former European Central Bank chief who helped create the euro currency, was found dead Sunday in his swimming pool in southeastern France, officials said. He was 70.

Police did not give a cause for Duisenberg's death, but rescue teams and police said Duisenberg was found unconscious in the swimming pool at his home in the town of Faucon and could not be resuscitated.

Duisenberg was the first head of the ECB, serving from 1998 to 2003. Having shepherded the euro through its introduction in 1999, he became known as the father of the 12-nation European common currency.

"With his calm manner, he established people's basic trust in the euro," German Finance Minister Hans Eichel told The Associated Press in Berlin. "We will remember his personality and what he achieved."

Tall and stoop-shouldered, with a large mane of white hair, Duisenberg sometimes appeared more of a professor than a heavyweight policy-maker. A chain-smoking golf lover, he kept a decidedly low profile as the ECB chief but was a major figurehead bearing overall responsibility for price stability in the euro zone of more than 300 million people.

During his tenure at the bank, Duisenberg was known for his cautious monetary policy and was eager to defend the euro through its early years.

He sometimes frustrated financial markets and politicians by sticking to the bank's inflation-fighting stance, keeping rates higher than some investors and officials would have liked.

"I hear, but I don't listen" to such pleas, was one of his typically blunt responses. Duisenberg repeatedly said it was up to European governments to pursue structural reforms — such as loosening rigid rules on hiring and firing — if they wanted more growth.

Higher rates are the bank's main tool to fight inflation, but they can crimp economic growth. The bank's tight policy helped keep the euro a strong, stable currency even as it is criticized as a drag on growth.

One of Duisenberg's biggest achievements was the smooth introduction of euro notes and coins in early 2002. Twelve national currencies were removed from circulation by banks and shops and replaced with the new money in a huge logistical effort that defied predictions of long lines and consumer confusion.

Duisenberg, who unabashedly sought to model the ECB on the U.S.
Federal Reserve Bank, was at times referred to as "Europe's Greenspan" — a reference to Fed chief
Alan Greenspan.

His selection as ECB chief was championed by Germany — Europe's biggest economy — but faced controversy when France proposed its central banker, Jean-Claude Trichet, as a rival candidate. Trichet took over in 2003.

Trichet, in a statement, called Duisenberg's death a "terrible loss," and credited him with a decisive role in setting up EU monetary institutions, overseeing the euro launch and building confidence in the currency.

Willem Frederik Duisenberg was born July 9, 1935, in the Dutch city of Heerenven. He became a member of the Dutch Labor party, and received a doctorate in economics from Groningen University, writing his dissertation on the economic consequences of disarmament.

Duisenberg also served as finance minister and central bank chief in the Netherlands, and once ran the European Monetary Institute — an ECB predecessor — in Frankfurt, Germany.

He is survived by his wife, Gretta Duisenberg-Bedier de Prairie, and two adult sons.

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