Diplomats say Trichet trickery is likely to cost France in future

Date: 07/05/1998

By Tim Jones

FRENCH officials will pay the price for their president's intransigence at last weekend's acrimonious euro-summit, warn diplomats from several other EU member states.

They say Jacques Chirac's refusal to allow an unfettered eight-year term for Dutchman Wim Duisenberg as president of the European Central Bank and the perception that he spoiled the euro-party has caused great ill-will among most EU governments.

"Being the French, they may have got away with it but it has created a lot of bad feeling," said one. "I don't think Chirac had a victory," said another. "He irritated everyone and he didn't get written guarantees for Duisenberg to go."

The officials, none of whom wished to be identified, believe the French will feel the 'Chirac effect' first in the next round of appointments to international and EU institutions.

The London-based European Bank for Reconstruction and Development (EBRD), which has been run by Frenchmen since its creation in 1990 and has been without a president since Jacques de Larosière stepped down late last year, may be the first casualty.

Banker Philippe Lagayette's candidacy has been weakened by Chirac's success in getting a Frenchman appointed as the ECB's vice-president, to be followed by Jean-Claude Trichet as president.

Meanwhile, Christian Sautter, the French state secretary for the budget, had been a front-runner for the job of heading the new EU tax monitoring group tasked with enforcing a 'code of conduct' to wipe out predatory corporate tax breaks in the Union.

However, diplomats believe the group's presidency, a highly influential post in the first years of economic and monetary union, is now more likely to go to UK Treasury Minister Dawn Primarolo or Swedish Finance State Secretary Knut Rexed.

Officials claim Chancellor Helmut Kohl feels betrayed by Chirac who, he believes, took advantage of his political weakness in the run-up to September's federal elections in Germany.

This will help the case of Kohl's diplomatic adviser Joachim Bitterlich, who is hotly tipped to become the EU's high representative - the public face of Union foreign policy - when the post comes up for grabs next year.

Diplomats claim France made no explicit trade-offs in return for securing Trichet's place at the ECB, but they believe Paris' position will be weakened in key policy areas.

"The strange death of the New Transatlantic Marketplace (NTM) last week is a good example," said one. "When 'Son of NTM' comes back, and you can be sure it will, there will be a lot less understanding of French concerns."

Trade Commissioner Sir Leon Brittan's ambitious plan was killed off at last week's meeting of EU foreign ministers by implacable French opposition.

"If Sir Leon comes back with something which allays the concerns of moderate states, then the French will be isolated and it's hard to see anyone coming to their aid," said one national official.

Governments are at least relieved that the controversial summit compromise will not face a legal challenge from the European Parliament, despite President José-Maria Gil-Robles' angry reaction to the accord at the weekend. The Parliament's legal service has concluded that the treaty was not violated by the decision.

MEPs were, however, expected to seek assurances from Duisenberg when he appeared before them today (7 May) for a confirmation hearing that he will not allow politicians to influence his policy-making or the timing of his decision to step down from the presidency.