Two days after the near faultless introduction of nine billion euro banknotes and more than 51 billion euro coins on 1 January 2002, Wim Duisenberg, the first President of the European Central Bank, began a press conference with the bold statement: "Good afternoon, Ladies and Gentlemen. We are currently writing history."
But Duisenberg was not good at sticking to the script, particularly if it was high-flown and rhetorical. Within a couple of minutes he was giving journalists a more personal and unorthodox yardstick of the success of the changeover. "The Big Mac I bought yesterday evening cost me, together with a strawberry milkshake, €4.45," revealed the Central Bank president. "That was exactly the same amount, when converted, as I paid last week in Deutsche Mark." The episode was characteristic of Duisenberg's remarkable career. A brilliant economist, a cultured and humorous man and a central banker who presided over a moment of history, Duisenberg's choice of phrase often detracted from his considerable achievements.
As its first president, Duisenberg built up the European Central Bank as an institution while facing an unprecedented challenge, one which many had predicted would end in failure. In July 1993 the British prime minister John Major had dismissed the idea of the euro as having "all the quaintness of a rain dance and about the same potency". Yet, five and a half years later, the euro existed as exchange rates were locked. Despite predictions of chaos 12 countries duly dumped their notes and coins in favour of euros in January 2002. If the notion of a single currency was the creation of politicians, much of the credit for the smoothness of its introduction belongs to Duisenberg. Yet he is better remembered for verbal slips which won him the continental nickname "Wim le gaffeur" and the British tabloid equivalent: "Dim Wim".
It goes without saying that Duisenberg was hardly dim. Born Willem Frederik Duisenberg in 1935 in Heerenveen, the Netherlands, he was educated at the University of Groningen before joining the International Monetary Fund in 1965. In 1969 he became an adviser to the governing board of the Nederlandsche Bank, the Dutch central bank, before moving to Amsterdam University as Professor of Macro-Economics. An adviser to the opposition Labour Party on economic policy, Duisenberg turned his back on academia and banking and entered politics. When Joop den Uyl formed a centre-left government in 1973, Duisenberg landed the post of finance minister. Five years after leaving the government, he returned to the Nederlandsche Bank, this time as president, a job which he occupied for 15 years, establishing his credentials for monetary orthodoxy and presiding over what came to be known as the Dutch economic miracle.
The tall, stooping, multi-lingual Dutchman stood out in the grey world of central bankers not just because of his shock of white hair and his colourful turn of phrase but because of his outside interests. A chain-smoker and lover of fine wine who spent much of his time at his holiday house in the Vaucluse region of France, Duisenberg was also a golfing fanatic with a handicap of 17. He once failed to turn up for an appointment with Dutch bankers at a meeting of the IMF and World Bank only for it to emerge later that he was on the golf course, winning a tournament organised by the Spanish hosts.
This dash of panache helped his candidature in 1998 for the job of the ECB president: Europe's answer to the legendary head of the US Federal Reserve, Alan Greenspan. More importantly, he had the backing of Germany which, at a summit chaired by Tony Blair, was determined to secure its candidate for the job to allay domestic anxiety about giving up the D-mark. With his reputation for orthodoxy and inflation fighting, Duisenberg was, for Berlin, the next best thing to a German banker.
What followed developed into a bitter Franco-German row, as "the longest lunch in EU history" dragged on all day and past midnight. As France pushed the claims of its candidate, Jean-Claude Trichet, the summit descended into chaos. At one point Belgium's then prime minister, Jean-Luc Dehaene, was so exasperated that he led colleagues off to eat in a local restaurant. The result, when it came, was a messy "gentleman's agreement" under which it was agreed informally that Duisenberg would step down half way through his eight-year mandate, in 2002.
Perhaps because of his close links with the Bundesbank, Duisenberg was in for a rough ride when he arrived at the bank's headquarters in the Eurotower in Frankfurt. His experience in the Netherlands had left him less well prepared than he appeared because his policy there had been to forge the guilder into a surrogate of Germany's strong currency. Hence the French nickname for Duisenberg was "Monsieur Cinq Secondes", supposedly the length of time it took for the Dutch central bank to follow interest-rate moves by its bigger German cousin.
The job of running a global currency was very different and Duisenberg rapidly learned how one, ill-chosen, word could annoy governments or move the markets. Ensconced in Frankfurt he was determined to bear down on inflation and to assert the bank's independence from politicians. But sometimes this was done without the subtlety expected by Europe's capitals, particularly Paris from where pressure for a reduction of interest rates was strongest. Aware of the bank's lack of accountability, Duisenberg, who was direct by nature, sought to be open in interviews but communication proved to be his Achilles' heel. He famously summarised Britain's refusal to join the euro as a "psycho-political" problem. Worse, as the currency's value slumped, he suggested that it would make no sense for central banks to support it by getting into the market in the event of a war in the Middle East. Traders took that as a cue to dump the euro.
To Duisenberg's satisfaction his period in office was extended by one year because, by 2002, his anointed successor, Trichet, was still embroiled in a legal case involving the collapsed bank Crédit Lyonnais. When the Dutchman finally announced his retirement he said he was doing so because, were he to have carried on to the end of the mandate in 2006, he would have been 72. It was, he said, too old "for the duties accompanying this job", before adding, with a humorous but risqué sideswipe at his 77-year-old transatlantic rival: "Alan Greenspan, are you listening?"
Duisenberg was married twice. His second wife, Gretta, gained a public profile as a supporter of the Palestinian cause.
Perhaps it is fitting that he died at his home in the Vaucluse. The Dutchman told one interviewer that it was "every central banker's dream" to preside over the introduction of a new currency but he spurned official launch celebrations on the crucial New Year's Eve for a private evening with friends in France. On 1 January he was up early, however, driving around small villages of Provence watching people withdraw the new notes from bank machines, a sight which he described as a triumph.
Stephen CastleReuse content