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. Last Updated: 07/27/2016

ECB Post Hinges on French Court Decision

PARIS -- A French court is expected to hand down a verdict fraught with consequences for Europe's economies Wednesday when it decides, in effect, whether the president of the Bank of France, Jean-Claude Trichet, still has a chance of becoming the next president of the European Central Bank.

A three-judge panel in Paris is hearing a criminal case against Trichet and eight other defendants stemming from the time in the early 1990s when Trichet was the director of the French treasury. They are accused of concealing problems at one of France's biggest banks, Credit Lyonnais, which was owned by the state at the time.

French prosecutors have accused Trichet, 60, of conspiring in a fraudulent concealment of the extent of the bank's losses and the provisions it had to make to cover them. They have asked the court to give him a 10-month suspended sentence.

The French government has said that it has a gentlemen's agreement with the other 11 nations that use the euro that Trichet will succeed Wim Duisenberg as president of the European Central Bank. Duisenberg planned to retire in July, but he has delayed his departure to give Trichet time to fight the charges and be ready to succeed him. If Trichet is convicted, his chances of succeeding Duisenberg would be greatly reduced.

Testifying early in the trial, which began in January, Trichet said he harbored "no doubts about the sincerity of the accounts nor about the honesty and ethics" of the chairman of Credit Lyonnais at the time in question, Jean-Yves Haberer. Haberer is also on trial, and prosecutors have asked for an 18-month suspended sentence for him. All nine defendants have denied the charges against them.