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ECB boss stirs debate
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January 3, 2002: 6:27 a.m. ET
Duisenberg may not be ready to retire just yet, throws spanner into euro launch
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LONDON (CNN) - Continental Europe is facing a year of uncertainty, not only because of a weak economic outlook but also due to a cloud hanging over the architect of the zone's monetary policy.
Wim Duisenberg, the president of the European Central Bank, has never been one to avoid the spotlight, or shy away from controversy. Now he has ensured the debate over his record -- and his possible departure -- will make headlines for much of 2002.
That debate already managed to steal some of the thunder from the January 1 rollout of euro notes and coins.
Duisenberg renewed debate over his future during a year-end interview on Dutch television, in which he denied there were any plans for him to step down before the end of the year.
He said he would still be in the job "this time next year," and added: "I like what I am doing."
On Wednesday, the Italian newspaper la Repubblica quoted him in an interview as saying he had not yet decided when he would retire. "When I have reached a decision, I will make it public."
Duisenberg, the head of the Dutch central bank, was appointed to an eight-year term as ECB president in May 1998.
That decision by European Union leaders came despite opposition from French President Jacques Chirac, who wanted Bank of France Governor Jean-Claude Trichet to have the job.
The compromise, according to Chirac, was a "gentlemen's agreement" whereby Duisenberg would make way for Trichet, or another French
representative, midway through his term in June 2002.
Duisenberg, 66, has always disputed Chirac's version of events.
His official position is that he would stand down sometime before the end of his term in mid-2006 due to his age. But he has also said he might retire after the introduction of euro notes and coins, which led to this week's speculation that he may leave sooner rather than later.
James Stewart, chief economist at Weavering Capital, told CNN that Duisenberg may be looking to make a smooth transition of power sometime in mid-2002.
"He is certainly quite stubborn and would like to stay as long as possible," he said. "But he wouldn't want to be seen as being pushed out."
Stewart said Trichet is still the most likely replacement for Duisenberg, although France could nominate someone else for the job.
But Trichet, who is also a member of the ECB's governing council, said on Wednesday the leadership succession of the ECB was not an issue.
Asked if he planned to take over from Duisenberg this year, Trichet told CNN: "We have an excellent president. That question does not exist at all."
European Monetary Affairs Commissioner Pedro Solbes also said Duisenberg's leadership was not in question. "As far as I'm concerned, he was nominated for an eight-year period," he told CNN.
But any "renewed battle over the chairmanship would tarnish the reputation of the bank," Raymond Van der Putten at BNP Paribas said told Reuters.
The ECB's reputation has already taken a beating under Duisenberg's leadership.
For the past year, the ECB has been criticized for failing to move quickly and decisively to stem the eurozone's economic downturn. Despite rising unemployment and weakening manufacturing sector, the central bank has been reluctant to lower interest rates.
In 2001, the ECB cut rates just four times, while the U.S. Federal Reserve cut 11 times and the Bank of England seven times.
The ECB's main barometre for measuring the health of the 12-nation eurozone has been inflation. So far, the inflation rate has remained above the central bank's target ceiling of 2 percent due to high food and oil prices
Lower interest rates would encourage spending which, the ECB maintains, would push prices higher.
Duisenberg has repeatedly defended the ECB's policy stance as
appropriate, and one that has created an environment for investment and economic growth this year.
The ECB has cut its economic growth forecast to between 0.7 and 1.7 percent in 2002, from previous estimates of 2.1 to 3.1 percent. 
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