Europe's single currency preparations were under scrutiny Monday after intense criticism of the way a weekend summit appointed the president of the European Central Bank that will manage the euro.
Politicians, business leaders and media blasted Sunday's decision by European Union leaders to split the eight-year presidency of the new bank between Wim Duisenberg of the Netherlands and Frenchman Jean-Claude Trichet."It's a rotten start for economic and monetary union and the euro," said Jaap De Hoop Scheffer, leader of the opposition Christian Demo-cratic Alliance party in the Netherlands.
However, fears that European money markets would see the central bank deal as undermining the credibility of the euro project did not materialize in early trading, which saw the German mark and other European currencies stabilize against the dollar.
In London, the pound - considered a safe haven currency because it is not among those nations joining the euro - held steady against European currencies and the dollar Monday. Traders described dealing as muted.
"It's not a big problem. It was quite obvious that you have to look for a compromise," said Harry Schroeder, senior economist at Commerzbank in Frankfurt, Germany. "We don't see any impact" on the markets.
The Frankfurt-based ECB will be one of the world's most powerful financial institutions after the euro's launch on Jan. 1 as the currency of 11 EU nations.
Its task is to ensure the stability of Europe's common currency, to fight inflation and set interest rates for the 11-nation euro bloc that will be the world's second-largest economy, just behind the United States.
Leaders of the 15 EU nations spent 11 hours Saturday haggling over who should head the bank, with France fighting a solo battle to make sure its man would replace Duisenberg in 2002.
In the end, President Jacques Chirac won a pledge that Duisenberg would step down mid-term in favor of Trichet - despite a clear requirement in the EU treaty that the job is held by one independent appointee for the full eight years.
The battle revealed deep differences between France and Germany, usually the twin engines behind the drive for Europe's monetary union.
The central bank fight overshadowed the confirmation over the weekend in Brussels that Germany, France, Italy, Spain, the Netherlands, Belgium, Austria, Portugal, Finland, Ireland and Luxembourg will switch to the euro on Jan. 1.
In Washington, President Clinton said in a television interview Monday that European countries must open their economies as they unify their currencies.
"In dealing with the United States and others they'll have to find a way to continue to make sure that they're sending us the right signals that they're opening their economies; they're unifying but they're not closing others out," Clinton said in an interview with the Wall Street Journal and CNBC.