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Germans, French dismiss report of European central bank deal

December 29, 1997

BONN, Germany (AP) _ German and French officials on Monday dismissed a magazine report that said Germany is ready to compromise with France over who should be president of the future European central bank.

According to the newsweekly Der Spiegel, Chancellor Helmut Kohl is offering Paris ``a sensible compromise″ in which France’s candidate for the job would split the first eight-year term with the Dutch candidate Germany prefers.

The new central bank is to start operating in 1999 with the introduction of Europe’s common currency, the euro. Based in Frankfurt, it will in effect take over from Germany’s powerful central bank, the Bundesbank.

France has proposed its national bank chief, Jean-Claude Trichet, to head the central bank. Most other European Union members favor Dutchman Wim Duisenberg, head of the bank’s forerunner, the European Monetary Institute.

Der Spiegel reported that under a deal laid out by German Finance Minister Theo Waigel, Trichet would spend four years as head of the European Bank for Reconstruction and Development, which helps eastern Europe. Duisenberg would resign midway through the term to make way for Trichet under the plan.

``We are dismissing this as speculation,″ Finance Ministry spokesman Boris Knapp said of the report, which hit newsstands Monday. The magazine did not say where or to whom Waigel made his comments.

In Paris, a spokesman for French President Jacques Chirac said such a compromise offer would be ``ridiculous.″

Der Spiegel said such a deal would be ``a seedy compromise″ because the EU treaty setting out the way to monetary union foresaw a long, one-time term precisely to safeguard the central bank’s freedom from political interference.

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