A Bank (and Money) Worth Trust

Most people yawn when asked to think about their nation's central bank. Yet few institutions are as important to the standard of living and stability of any modern industrial democracy.

We elect politicians to deal with the national budget. But too often they abandon rigorous analysis when it comes to sorting out what is essential from what is merely desirable or vote-wooing. So it falls to appointed central bankers to enforce rigor in protecting the value of their citizens' money - the stuff used to buy groceries, pay for junior's new shoes, finance a car, etc.

Americans are hazily aware that their two most recent Federal Reserve chairmen, Paul Volcker and Alan Greenspan, have protected the dollar and the economy with great success.

But what about their European cousins? Europe's new central bank (and money) are about to be born. And already the bank and euro have suffered an unsettling political intrusion. France has forced a splitting of the first eight-year term of the bank's supposedly independent presidency. The two men who will split the term are both rigorous advocates of a strong currency. Fine. But the political meddling sets a bad precedent.

France's President Chirac and Prime Minister Jospin essentially blackmailed the 10 other "euro" nations into accepting the forced retirement of the majority's candidate midway through his term. The new currency bloc will, we trust, survive this political fiddling. French citizens, like their counterparts throughout Europe, need to trust the solidity of their new bank and its coinage. That means insulation from member states' short-term political demands.

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