Barclays chief urges further EMU delay

The chief executive of Barclays bank, Martin Taylor, yesterday stepped up his call for a postponement of a single currency in the wake of the strong showing by the left in the first round of the French elections.

Mr Taylor, who has come out strongly against economic and monetary union in recent months, said Germany's budget woes and the left's strong gains in France made EMU less likely to start on time.

"I think there is a much lower chance of EMU happening on time today than there was 10 days ago. More worryingly, there is a much higher chance of a bad EMU happening." he said speaking in St Gallen, Switzerland.

Mr Taylor called for the 1999 start date to be put back and cited the danger of politicians manipulating the single currency project to fit political considerations, undermining the new currency, the euro.

Lionel Jospin, the French socialist leader, is a supporter of EMU like Alain Juppe, who announced earlier this week that he will resign as prime minister of France's centre-right government. But Mr Jospin wants a looser interpretation of the Maastricht criteria, immediate entry for Italy and Spain and an end to the fiscal tightening that has caused so much pain in France and helped produce such a poor showing for the Gaullists in the first round of voting.

Mr Taylor said there was a danger of a French government coming into power with "a fantasy agenda" and noted "increasing distrust among the German population for what is happening".

"If governments against this background do try to fix the currencies it is the duty of currency speculators to blow them apart." he said. "I think by doing that they would do the world a very good turn."

He hoped EMU would be postponed until it could have a more favourable environment. ''The earlier the postponement comes the more credible it will be," he said.

The French markets recovered some of their composure yesterday after the sharp fall in share prices that followed news of the government's poor showing in the first round of elections. The CAC-40 Index of leading French shares ended the day 19.8 points up at 2680.34 - a rise of just under half a per cent.