BRUSSELS, Belgium (AP) — A dispute between France and Germany over who should run one of the world’s most powerful financial institutions threatens to spoil this weekend’s landmark summit to launch Europe’s single currency.
The standoff also is raising doubts about the independence of the European Central Bank, which will run the monetary policy of the 11 nations adopting the euro currency.
The bank, which the European Union hopes will come to rival the U.S. Federal Reserve, is supposed to be free from political influence of individual EU members. It begins work July 1 in the German finance center of Frankfurt.
France stands virtually alone in its bid to place Bank of France Governor Jean-Claude Trichet in the top job. Germany and the other EU nations want Dutchman Wim Duisenberg to get the job. Both men are widely respected. Their main distinction appears to be nationality.
The dispute risks spoiling the party as Europe ushers in a new era in its quest for unity.
Saturday’s summit in Brussels will sound a death knell for the German mark, the French franc and other currencies that have been the most potent symbols of national identity. It will lead to the formation of a vast economic zone of 290 million people stretching from the Mediterranean shores of Spain to Finland’s Arctic forests.
Barring some last-minute upset that would plunge the EU into a deep crisis, its leaders will confirm Germany, France, Italy, Spain, the Netherlands, Austria, Belgium, Portugal, Finland, Ireland and Luxembourg as the first members of euro-land. The European Parliament voted overwhelmingly Thursday to endorse that list.
The summit will also fix the exchange rates at which their currencies will be locked in preparation for the euro’s birth on Jan. 1. All 11 currencies will rise and fall together on currency markets, effectively meaning the European monetary union starts next week.