European Central Bank governor, Mr Wim Duisenberg, is expected to extend his term in office beyond his scheduled July retirement date, European Union finance ministers said this afternoon.
Finance ministers from the 15 EU nations were likely to request Mr Duisenberg to stay on for at least three months because his designated sucessor, Bank of France Governor Mr Jean-Claude Trichet, is embroiled in a banking scandal that could affect his availability.
Mr Trichet faces charges of spreading false information and complicity in reporting inexact accounts at French bank Credit Lyonnais. A judgment is due June 18, just weeks before he was expected to replace Mr Duisenberg.
Ministers were hoping that a clear decision on Mr Duisenberg now would reduce uncertainty in financial markets.
"I don't know of any colleague who stands in the way" of Mr Duisenberg staying on, said Luxembourg Prime Minister Mr Jean-Claude Juncker, who also serves as finance minister.
Arriving for the two-day meeting, the Minister for Finance Mr McCreevy said he expected Mr Duisenberg will be asked to stay until September or October.
Mr Duisenberg will join the ministers on Saturday and bring warnings that a long war will further sap economic strength from the union.
Earlier this week, the ECB governor said that the EU should only expect a moderate rate of economic growth for 2003, putting it at around 1 percent for the year.
In Berlin today, Chancellor Mr Gerhard Schroeder said he saw no threat of Germany slipping into recession, despite concern that the war in Iraq could disrupt the world economy.
"I see no recession risk for Germany," Schroeder said, insisting that far-reaching economic reforms begun since his September re-election were already buoying growth.
The German economy, Europe's biggest, grew by just 0.2 per cent last year.
Mr Duisenberg was appointed as the ECB's first governor in 1998. By threatening to veto his appointment, French President Mr Jacques Chirac forced Mr Duisenberg into a pledge to hand the job to Mr Trichet before the end of the governor's eight-year tenure.
Mr Duisenberg has told EU officials he is willing to stay past his July 9 retirement date to ensure a smooth transition, but how long that might be "is completely uncertain."
"As long as the transition is smooth, I and the (ECB) governing council will be very, very satisfied," he said yesterday.