Saturday 3 December 2016

Father of the euro dies at 86 at home in Belgium

Jim Neuger

Published 12/05/2015 | 02:30

Baron Alexandre Lamfalussy, chairman of the Superior Committee for a new financial architecture in Belgium, attends the presentation of the report of the Lamfalussy Committee at the Egmont Palace in Brussels June 16, 2009. REUTERS/Francois Lenoir
Baron Alexandre Lamfalussy, chairman of the Superior Committee for a new financial architecture in Belgium, attends the presentation of the report of the Lamfalussy Committee at the Egmont Palace in Brussels June 16, 2009. REUTERS/Francois Lenoir

Alexandre Lamfalussy, a Hungarian refugee from communism who emigrated to Belgium with a few dollars in his pocket and went on to become a founding father of the euro, has died. He was 86.

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Mr Lamfalussy died May 9, according to Belga, the Belgian national newswire, which cited his family. No cause was given.

The European Central Bank (ECB) acknowledged the death in a statement.

Mr Lamfalussy was the first president of the European Monetary Institute, a short-lived institution created in 1994 with the sole purpose of setting up the ECB and then willing itself out of existence.

"He foresaw the essential need for financial integration in Europe to go hand in hand with monetary integration and actively drove this process forward," the ECB said.

First an academic economist, then private banker and finally a central banker, Lamfalussy defended the euro as a risk worth taking after the sovereign-debt crisis that came close to shattering the currency.

"The European Union couldn't exist without monetary union," he said in memoirs published in 2013. "We had to do it the hard way, resolutely."

Mr Lamfalussy's role in forging a path to monetary union began in 1976 when he embarked on a career at the Bank for International Settlements, the Basel, Switzerland-based clearinghouse for the world's central banks.

He was promoted to BIS general manager in 1985 and, three years later, joined a committee of central bankers who sketched a road map for the European currency. They included a future president of the ECB, Wim Duisenberg, and Carlo Azeglio Ciampi, who later became Italian prime minister and president.

Turning the road map into reality became his job when the EMI was established in Frankfurt, home of the German Bundesbank, then Europe's dominant rate-setting body.

The Bundesbank loomed so large over Europe's economy that Lamfalussy had to crawl out from under its shadow. After the EMI's first meeting in January 1994, he told reporters: "I shall not accept a greater influence from the Bundesbank."

In practice, the Bundesbank held sway in the setting-up of the ECB. Germany's monetary philosophy, scaffold of interest rates and definition of inflation became part of the ECB's toolkit.

Mr Lamfalussy said in his memoirs that he was approached to be the first head of the ECB, but declined because he was nearing 70. (Bloomberg)

Irish Independent

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