IF THE row over the presidency of the European Central Bank marring the launch of the euro seems to have had little impact on sterling or other European currencies, then the City's apparent dismissal of it as a political fuss may yet be telling.

For the point is that the running of the bank, and the critical fixing of interest rates in an economically-unified EU, is supposed to be a strictly-neutral, de-politicised and de-nationalised job.

And yet, at the outset, it seems it may be turning out otherwise.

For despite the compromise hammered out under Britain's euro-remote presidency, the fact is that the business comes down to a clash of national interests.

The deal is that German-backed Dutchman Wim Duisenberg will stand down half way through his eight-year term to allow France's Jean-Claude Trichet to take over for the next eight years. To achieve this - and the apparent bending of the Maastricht Treaty's terms to accommodate it - France was prepared to use its EU veto.

Why?

Is it merely that nationalist instincts and pride die hard in the new euro-led era of federalised finance?

Or, worse, is it that nationalist interests and influence may emerge to dangerously taint the independent functioning of the ECB - so that, some time in the future, should economic circumstances and employment levels in one member nation bring calls for unilateral action on interest rates, a less-than-independent ECB might not prevent it?

It is such fears - bolstered by past instances of the French acting out of self-interest and its government capitulating to internal industrial unrest to flout EU rules - that lie behind the concern that the ECB's independence has been compromised at the start.

If so, it may be more than a storm in a political teacup, as read by the City, but the dangerous undermining of the euro and economic unity.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.