European Central Bank Heir Apparent Cleared of Fraud Changes

A French court acquitted Bank of France Governor Jean-Claude Trichet of complicity in a corruption scandal on Wednesday. The ruling was the last obstacle preventing the economist from taking over the reins of the European Central Bank (ECB) from its current president, Dutchman Wim Duisenberg.

Trichet told the press he was "moved" by the verdict that dispelled accusations that he had known the state-supported bank Crédit Lyonnais kept misleading accounts while he was head of the French finance ministry's treasury department in the 1990s.

Romano Prodi, European Union Commission President, welcomed the outcome of the trial, saying it would make the change at the top of the ECB "significantly easier."

But the French public prosecutor said he was not sure if he would appeal the verdict. He has until July 7 to decide. If the matter is put to rest, Trichet could be officially designated the next ECB president in the coming months.

Next in line

Trichet has been in the running for the top position since the ECB was created. He failed to get the job the first time around due to German unease over a Frenchman pulling the bank’s strings. Instead the euro zone countries opted for the neutral Dutchman Duisenberg.

But after Frankfurt was selected as the ECB headquarters five years ago, France insisted that the bank's next head should be French. The other 11 countries in the monetary union agreed to the demands, including the appeal for Duisenberg's eight-year term to be shortened to make room for France's choice. Thus, the stage was set for Trichet, one of France's most respected bankers.

However, the investigation, which began in 2000, and the subsequent trial in January 2003 of Trichet and eight other defendants in the Crédit Lyonnais scandal put a halt to a smooth succession.

In April, Duisenberg announced he would postpone his retirement -- which was originally set for July 9 -- to wait for the next in line. Who that was to be hinged on the outcome of Wednesday’s trial.

Despite the accusations against Trichet, the financial community has always considered him a natural choice for the top post at the ECB. European Union leaders such as France’s Jacques Chirac and Germany’s Gerhard Schröder have already said they would call for a quick naming of the heir apparent at their summit on Friday in Thessaloniki, Greece.