Euro ministers refuse to lend their support to beleaguered ECB chief

Wim Duisenberg, the president of the European Central Bank, came under increased pressure yesterday as an Italian minister attacked him and France's finance minister refused to issue a public declaration of support.

Wim Duisenberg, the president of the European Central Bank, came under increased pressure yesterday as an Italian minister attacked him and France's finance minister refused to issue a public declaration of support.

Asked three times at a press conference in Luxembourg to endorse Mr Duisenberg, France's finance minister, Laurent Fabius, refused to do so, adding that he had "no comment to make on this matter".

Earlier the Italian labour minister Cesare Salvi, also attending the EU meeting in Luxembourg, described remarks made by Mr Duisenberg on Monday - which hit the value of the euro - as "superficial".

Mr Salvi was later rebuked by the Italian Treasury minister, Vincenzo Visco. However, other EU finance ministers showed a marked reluctance to shore up the ECB president and Germany's Hans Eichel, declined to comment. Instead his spokesman Torsten Albig said: "There is no personnel debate. We are happy with the work of the ECB president and of the ECB."

The attacks on Mr Duisenberg follow comments that the bank was unlikely to intervene if Middle East tensions forced the euro down further against the US dollar.

The episode has sapped confidence in Mr Duisenberg and threatens to weaken his already difficult position as the man responsible for defending the value of the currency.

The ECB was forced to lend official support to its embattled president. Asked whether Mr Duisenberg would continue as ECB president, a spokesman said: "That is for sure."

Mr Duisenberg, 65, was appointed for an eight-year term in 1998 but indicated that given his age he would not serve the full term. Under a controversial "gentleman's agreement", Mr Duisenberg is due to give way to Jean-Claude Trichet, the governor of the Bank of France, in 2002. While that may be regarded as a positive development in the market, because of Mr Trichet's record in defending the franc, the French central banker is now under a formal investigation relating to the crisis at Credit Lyonnais bank.

Analysts said they doubted Mr Duisenberg would be forced to step down even earlier than 2002 but said the latest row had further dented confidence in the euro.

Stephen Webster, chief international economist at 4cast, an independent analysts firm, said Mr Duisenberg had plainly made a "gaffe" by talking about intervention policy.

But he added: "I don't think it had got to the point where he would be forced to consider resignation the given the political embarrassment that would come from a further shock."

Stephen Lewis, chief economist at Monument Derivatives in London said: "He seems to have got into hot water but it would be difficult for them to get rid of him because of the implications that the ECB was no longer independent."

The problems for the ECB were compounded by figures published yesterday, showing that Euroland inflation surged further above the ECB's target last month. Consumer prices rose 2.8 per cent in the year to September, up sharply from August's 2.3 per cent and ahead of forecasts of 2.7 per cent.

The rise was mostly due to rising oil prices but the core rate, which excludes energy prices, ticked up to 1.6 per cent from 1.5 per cent.

The rise in inflation will feature at the ECB's meeting on interest rates tomorrow.

Charles Diebel, an economist at Société Générale Strauss Turnbull, said: "I don't think it means that the ECB are going to hike rates, but it may throw some doubt on the concept that they are done."