On the frontline: Frenchman Jean-Claude Trichet, European Central Bank

At the beginning of this week, he took over as president of the European Central Bank and became arguably one of Europe’s most powerful men.

Much more than just an impressive sounding job, he is responsible for overseeing monetary policy for 300 million people with annual output of six trillion euros.

Many thought the job would go to the 61-year-old Frenchman when the bank was created in 1998. Instead, politics meant the post went to Dutchman Wim Duisenberg after the Germans got cold feet at the prospect of a Frenchman in charge of European finance policy.

However, in such times when Jacques Chirac can represent Germany at an international conference, the prospect of Trichet in charge no longer holds fears for Berlin. This is good news for those of us who prefer our bankers to have a touch of glamour.

Unlike Duisenberg, who, though widely respected, may not be the first person you would invite to a dinner party, Trichet is reputed to be quite the bon viveur.

A lover of poetry, charming and charismatic are just some of the descriptions that have been thrown Trichet’s way. Dull he is not.

But although his personality appears to conform to some Gallic stereotypes, his banking policies do not. He has a reputation for being puritanical about budgetary deficits and during his many years in French governmental positions – between 1971 and 1987 he held various posts in the finance ministry – he sought valiantly to reduce Paris’ debt.

His background is typical for someone who is a member of the French elite.

Born in 1942 in Lyons, Trichet graduated from the prestigious Ecole Nationale d’Administration.

He served as an adviser to former French president Valery Giscard d’Estaing and was chief of staff of then finance minister Edouard Balladur in 1986-87.

Trichet served under Gaullist and socialist governments and for six years from 1987 served as treasury director. In 1993, he became the first governor to run the Bank of France after the central bank was made independent.

His path to the top has not been effortless, though. Trichet was embroiled in the state-owned bank Credit Lyonnais scandal that engulfed French political and business life in the nineties. Trichet was accused of complicity in producing misleading accounts, but all charges were dropped earlier this year.

He is likely to make swinging changes at the ECB. On Trichet’s agenda are a much slimmer administration and more transparent workings, although this may be anathema to the banking world, plus a more realistic inflation target. Possible changes to the strict policy of targeting inflation, rather than aiding growth could also become policy.

And who knows, Trichet may still be in charge by the time the UK gets around to a referendum on the euro, as Duisenberg was 68 when he stepped down.

If that happens then Jean-Claude Trichet will definitely become a well-known name over here.


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