ECB needs leadership and less consensus

You would imagine the European Central Bank would know better by this stage than to tempt fate in the markets. That didn't stop ECB president Mr Wim Duisenberg announcing in an Italian newspaper interview this week that he believed the euro's weakness was over and that it had strong potential to rise. No-one would contest the latter assertion but, within 36 hours, the markets had knocked a further chunk off the value of the currency.

Partly this was due to entirely foreseeable poor economic data and projections from European economies - notably France and Germany - and partly to the equally foreseeable decision by the US Federal Reserve to cut interest rates for the sixth time this year.

Figuring out what the ECB thinks is as difficult as it ever was, but there was one interesting revelation from Mr Duisenberg this week. He told a US newspaper that he preferred to operate by consensus and, in a situation where a vote might prove very contentious his instinct was to defer it until a clearer consensus emerged. Maybe that's the problem . . . to most of us outside the room, it would appear the ECB needs more leadership and less consensus.

dcoyle@irish-times.ie