The Netherlands dug in yesterday for a fight to the bitter end over Europe's top monetary job, rejecting a report it could accept an agreement to split the coveted post's first term with France.
Diplomats said the EU was now close to dividing into two camps over whether to try to reach agreement over the European Central Bank (ECB) post at its May 2nd summit called to consummate Economic and Monetary Union or to postpone the debate until after Dutch elections due on May 6th.
Dutch government spokesman Mr Jaap van der Ploeg poured cold water on a newspaper report that there could be a compromise deal to share the eight-year ECB presidency between Dutchman Mr Wim Duisenberg and Frenchman Mr Jean-Claude Trichet.
"The standpoint is that (European Monetary Institute President) Duisenberg has to be the first president of the bank during eight years. That has been our point of view for a few months," he said.
One diplomat said the tussle between France and EU backers of Mr Duisenberg's candidacy was reflected in different views on how to settle the issue.
"There's one which says you should take a decision before the summit because then we would give a good sign to all concerned.
"The other argument is that we should do it afterwards . . . that is a movement being inspired by the fact there are elections in the Netherlands a week after the summit."
Opinion polls show the Dutch Prime Minister Mr Wim Kok is poised to win the elections. But they also show strong support for the Liberal leader Mr Frits Bolkestein, who wants the Netherlands to take a tougher stance in Europe after a series of past failures to secure top jobs and institutions, including the ECB.
The odds were that an agreement could still be reached on May 2nd, diplomats said, noting the German Chancellor, Mr Helmut Kohl's declaration on Tuesday that he was "absolutely certain" this would be the case. In a German radio interview on Tuesday, the French Foreign Minister, Mr Hubert Vedrine, offered the same view.
But in an atmosphere that had become "poisonous", as one senior monetary figure put it, anything was possible, including the emergence of a compromise candidate.
So far, the only other formal nominations for the ECB board are the Finnish central bank governor, Mr Sirrka Hamalainen, and the Austrian parliamentarian, Mr Ewald Nowotny.
The ECB president will become the most powerful monetary figure in the EU, serving an eight-year post and having the casting vote should the bank's governing council - made up of national central bank governors and the ECB board members - fail to agree over the direction of interest rates. The holder cannot be sacked.
The Netherlands and France have been at loggerheads over the job since last November, when the French government nominated Mr Trichet, shattering a consensus that Mr Duisenberg would get the post.
French ministers said the decision was motivated by the belief the top ECB appointment should be seen to be political and not simply an endorsement of central bankers' wishes.
The war of words intensified last week, with both sides threatening to veto each other's candidate. Mr Kohl appeared to put pressure on the French President, MrJacques Chirac, on Tuesday, telling a parliament committee there was never any deal on locating the ECB in Frankfurt in return for a Frenchman getting the first term.
