EU names Trichet as next ECB boss

BANK of France Governor Jean-Claude Trichet has won the backing of European government leaders to become the next European Central Bank president.

He will take on the task of steering the euro countries away from deflation and recession.

Trichet, who was promised the post in 1998, overcame the biggest hurdle to taking command of interest rates in the $8 trillion 12-nation economy on Wednesday, when a Paris court cleared him of false-accounting charges.

At a summit in Porto Carras, Greece, the 15 EU leaders started an appointment process that will take about four months to complete. Trichet will succeed Wim Duisenberg, who delayed his planned July 9 retirement.

“Trichet will be the next president of the European Central Bank,’ Luxembourg Prime Minister Jean-Claude Juncker said. Europe’s economy stagnated in the first quarter and unemployment is at a three-year high of 8.8%.

The French economy may grow at its slowest pace in a decade this year, the statistics office said yesterday. German producer prices had their biggest drop in 10 months in May, adding to deflation concerns.

Trichet, 60, was found not guilty of helping Credit Lyonnais SA falsify its accounts in 1992 and 1993 when he was head of the French treasury.

The leaders have decided on Trichet as a successor to Duisenberg and will call on finance ministers to start the appointment process, a statement said.

As head of the French treasury and France’s central bank, Trichet was one of the founding fathers of the euro, playing a role in the talks that gave the ECB

the same inflation-fighting mandate as Germany’s Bundesbank.

EU leaders lived up to a concession made to French President Jacques Chirac in 1998 when he forced the EU to cut short Duisenberg’s term as the ECB’s first president and to replace him with a Frenchman.