Trichet ignores Stark warnings

By Stewart Fleming

Date: 23/02/06

The President of the European Central Bank (ECB) Jean-Claude Trichet was forced this week, in the face of criticism from MEPs, to defend the choice of the German Jürgen Stark, to join the ECB's executive board and the process by which he was chosen.

Stark, currently Bundesbank vice-president, who is to take up his new position on the six-person board in June, is the sole nominee to replace his compatriot Otmar Issing.

His critics believe he has taken too hard a line on monetary policy in the past.

But, appearing before the European Parliament's economic policy committee on Monday (20 February), Trichet rejected what he said were harsh criticisms being made of Stark. He said Stark had "a remarkable wealth of experience" as a state secretary in Germany, as a sherpa preparing summit meetings for the German chancellor and in the planning that led up to the launch of the euro. "I have the highest esteem for him personally," Trichet added. He indicated that no decision had yet been made on how Issing's role as ECB chief economist might be redistributed among the board members.

Dutch Socialist Ieke van den Burg expressed "frustration" at the selection procedure through which four big countries, France, Germany, Spain and Italy, effectively claimed a national seat on the executive board, at odds with the EU treaty principle that board members are not country representatives.

Separately Trichet expressed confidence that the economic recovery in the eurozone was continuing and indicated that the ECB was likely to raise its benchmark interest rate again, probably to 2.50% at its meeting on 2 March.

Article reports that the President of the European Central Bank (ECB), Jean-Claude Trichet, was forced, in the face of criticism from MEPs, to defend the choice of the German Jürgen Stark, to join the ECB's executive board and the process by which he was chosen. Trichet appeared before the European Parliament's Committee on Economic and Monetary Affairs on 22 February 2006.