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Judge acquits ECB heir Trichet

Trichet leaves Paris courthouse after being acquitted
Trichet leaves Paris courthouse after being acquitted

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CNN's Charles Hodson has details on Trichet's financial scandal 

PARIS, France (CNN) -- Bank of France Governor Jean-Claude Trichet has been acquitted in a banking scandal trial, removing a major obstacle to him becoming the next president of the European Central Bank.

Trichet, who is favorite to succeed current president, Dutchman Wim Duisenberg, had been charged with falsifying accounts at former state-owned bank Credit Lyonnais.

The outright acquittal clears the way for European Union governments to confirm Trichet as successor to Duisenberg at their meeting in Greece next week.

"I am touched by the justice system's decision," Trichet said after the verdict. "Three years and two months ago I said that I had confidence in the justice system and it has now just ruled. I am happy and that's all I have to say."

The European Commission, the executive arm of the EU, welcomed the acquittal.

"I am very pleased to hear that Trichet was acquitted," EC President Romano Prodi told a press conference. "This obviously makes the question of succession much easier with regards to who is at the helm of the European Central Bank."

After Wednesday's acquittal, French President Jacques Chirac reiterated his support for Trichet's ECB bid.

Chirac helped secure Trichet's promotion at the ECB during a European Union summit in May 1998, after threatening to block Duisenberg's appointment.

EU leaders agreed that Duisenberg would step down in favor of a Frenchman before his eight-year mandate ended in 2006.

The president of the ECB sets interest rates for the 12-nation eurozone. It is a role that Trichet has been aspiring to fill for many years. (Profile)

Trichet was head of the French treasury at the time of the government rescue of Credit Lyonnais, believed to have cost taxpayers more than 100 billion francs ($14 billion).

He was placed under investigation in April 2000 for allegedly diffusing false information to markets and publishing misleading accounting records for the bank for 1992 and the first three months of 1993.

Credit Lyonnais found itself in financial difficulties by overborrowing to pay for rapid expansion and lending money to some of the worst business failures of the 1990s, piling up billions of dollars in bad debt.

Anything short of an acquittal would have dealt a devastating blow to Trichet's chances of becoming the next chief at the ECB -- and would have forced him to quit his current job as head of the French central bank as well.

The state prosecution service, which had asked the judge Olivier Perusset to convict Trichet and impose a suspended sentence of at least 10 months jail, said it had not decided whether to appeal.

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