Eurobank chief-to-be goes on trial for cover-up
Bank of France Governor Jean-Claude Trichet went on trial today on charges that could ruin his bid to become the next president of the European Central Bank.
Trichet, 60, is accused with eight other bankers and finance experts of covering-up losses during a state bailout of French bank Credit Lyonnais in the early 1990s.
The trial is being closely watched internationally because Trichet is due to take over from retiring European Central Bank President Wim Duisenberg this year.
The Paris court decided against a request to postpone the trial so prosecutors would have more time to examine new evidence contained in an accountancy report.
A postponement would have dealt another blow to Trichet, who has consistently denied the charges and hopes to be cleared before Duisenberg steps down in July. The trial is expected to last about six weeks.
A conviction could ignite a renewed tussle within Europe over who should take over the ECB, cause unease in financial markets and raise doubts about the stability of the institution that steers the world’s second-biggest economy.
Trichet was head of France’s Treasury at the time of a massive £21bn (€32.2bn) government rescue of Credit Lyonnais in the early 1990s.
The central bank chief was placed under investigation in 2000 for allegedly diffusing false information to markets and publishing inexact bank accounting records for 1992 and the first three months of 1993.
At the time, Credit Lyonnais racked up huge debts by over-borrowing to finance rapid expansion and lending money to many failed businesses. Only huge government cash injections kept it alive.
The bank was privatised in 1999, and the government sold its final stake in the company to rival BNP Paribas in November.
Trichet’s lawyers argue he did not have the necessary information nor the clout to influence what the bank reported in its financial results.
Trichet is a highly respected banker who helped draft the European Union’s Maastricht Treaty that set the foundations for the successful launch of Europe’s single currency a year ago.
