Jean Louis Pons, the European Commission director for monetary affairs, said yesterday it was possible a single currency could be introduced by 1997. 'It is too early to rule out this possibility, although we have a big problem of public finance that will require the goodwill of governments to stick to fiscal consolidation programmes,' he said, insisting everything depended on the strength of economic recovery.
The Commission is already preparing the technical groundwork for the introduction of a European currency, and Mr Pons yesterday singled out the pioneering role of the Decimal Currency Board (1967- 71), which he said 'played a key part in the successful implementation of the plan to introduce a decimal system; the UK experience shows the value of large-scale planning over a long period'.
In this case, the period could be very long indeed. The final stage of monetary union cannot go ahead until most member states meet the convergence criteria. And if this is not possible by 1997, everyone must wait until 1999.
However, informal discussions have begun between the finance ministries of some governments - including France, Germany, the Netherlands and Belgium - on whether to reinstate the narrower bands in the European Monetary System - a necessary precursor of monetary union. The bands were abandoned when the EMS came close to collapse last summer.
The British government, which fought to opt out of legislation creating a single currency, has said the issue is dead for the moment, but there is pressure to move the 12 member states to a tighter regime. The subject is likely to come up for discussion when finance ministers meet in Greece today.Reuse content