25 June 2003

EZA 543 - ECB Monetary

Pragmatic Trichet to bring more ECB integration (2)
European Central Bank presidential nominee Jean-Claude Trichet has always been a strong advocate of European integration and European Monetary Union. He has regarded this just as strongly aligned with French national interests as Germany's leaders have seen these goals as quintessential to its long-term national strategic objectives. The complete pragmatist, Trichet holds no adherence to any one economic approach but holds firmly liberal views. He thus exhibits a stronger bias toward the supply side but has sympathy with demand-side indications. In the ECB board, Trichet is likely to balance any excessive stress on intermediate monetary reference aggregates with a more broad-based view. He should form a natural alliance with vice-president Lucas Papademos even while taking on board German money and credit analysis. We therefore expect Trichet/Papademos to be a much stronger partnership at the head of the bank than their predecessors. The ECB is likely to move toward a more integrated stance with other European institutions such as the European Commission or the EcoFin. This is the second of a two-part profile.

SummaryAsset Conclusions:Trichet to move ECB toward better cooperation with European institutions: clearer interest rate, currency message should aid euro

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© Graham Bishop