ECB top job dispute casts shadow on euro summit

The conflict resolution skills of the British Prime Minister and President of the European Council, Mr Tony Blair, seem certain to be called on tomorrow to defuse the EU row over the presidency of the European Central Bank (ECB).

The dispute is still hanging over the weekend's summit announcement of the 11 likely participants in the launch of the euro.

There were solemn warnings yesterday from the Bundesbank, the European Commission and Parliament, that heads of government are expected to do the business on the ECB presidency. A growing determination to do so is expected to favour the Dutch candidate, Mr Wim Duisenberg, as Dutch room for compromise is constrained by their elections on May 6th. British sources say the issue will not be raised at this evening's brief meeting of Finance ministers but will be given a full airing over lunch at the summit on Saturday. And the decks were substantially cleared for the debate yesterday when the EU's secretive Monetary Committee is understood to have come close to final agreement on the disputed summit declaration. Diplomatic sources last night confirmed that the Taoiseach, Mr Ahern, and Mr Blair, will have also a brief bilateral meeting at midday tomorrow to update each other on the peace process.

"You can count on a decision" on the presidency, the German Chancellor, Dr Helmut Kohl, promised yesterday as the Bundesbank President, Dr Hans Tietmeyer, called for an urgent solution to the row between Germany and France over Mr Duisenberg and the latter's candidate, Mr Jean-Claude Trichet.

France's President Jacques Chirac said in Helsinki on Wednesday it was "psychologically desirable" that this weekend's summit should reach agreement on the contentious issue of who should head the future ECB but not "obligatory" under European Union rules.

The President of the European Commission, Mr Jacques Santer, says he is confident a deal can be done. "I am confident that the heads of state and government will not risk ruining a historic meeting just to settle personal disputes," he said in an interview yesterday with the Spanish daily El Mundo.

In a resolution passed by 417-32, MEPs urged the summit to "honour its commitments and propose a single candidate for the Presidency of the ECB".

For the British Presidency, in the chair, but aloof from the debate so far because they are not participating in the euro, it will be a crucial test.

Mr Blair will be in the spotlight, and no less than anyone else, he wants positive headlines from his first summit.

The text of tomorrow's summit conclusions will emphasise the need to sustain budgetary rigour once the euro is launched through the monitoring of member states' "sound budget policies". That will involve "early consideration of member states' budgetary intentions for 1999".