Clashes over role of `Mr or Ms Euro'

Click to follow
The Independent Online
EUROPEAN finance ministers will join battle this weekend in a new row over who should represent the euro on the international stage including the G7 and the International Monetary Fund.

The dispute, which pits the EU's larger countries against their smaller counterparts, underlines the enhanced global aspirations of the architects of the euro, and could lead to a clash with America.

The question of who becomes "Mr or Ms Euro" also raises questions about the role of the European Commission in shaping or presenting policy after the launch of the euro next January.

Officials in Brussels say there is no threat to Britain's G7 status, but argue that successful co-ordination of a Euro-11 policy would diminish the influence of the UK, which will be outside the first wave of monetary union.

At the informal meeting of finance ministers starting in Vienna today, the French finance minister Dominique Strauss-Kahn, will propose that the euro should be represented at G7 by the participating countries already represented there in rotation.

That would mean France, Germany and Italy taking turns to present the view of the Euro-11 bloc, after the European Commission had prepared a joint position taking on board the views of the other eight.

However the small and medium size nations - including Spain and Austria, which holds the EU presidency - are resisting the plan, arguing that their influence would be limited.

They would like to see the job of "Mr or Ms Euro" going to the rotating presidency of the Euro-11, (currently Austria). One alternative would be that the role is taken by the Commission, represented by its president, Jacques Santer, or the economic and monetary affairs commissioner, Yves Thibault de Silguy.

The issue has raised tensions in Brussels. Austria was one of the countries angered by being excluded from moves by Europe's G7 countries in reaction to the Russian crisis earlier this year.

In any event the European Central Bank governor, Wim Duisenberg, is likely to win a seat at G7. Any suggestion of a greater role for the Commission is likely to cause consternation in the US, which feels that Europe - with four participants including Britain - is already over-represented.

The model adopted for the G7 is expected to be applied to the IMF representation, although the Commission is unlikely to be given a presentational role there because of the way the organisation is constituted.

Today's informal Ecofin meeting will also broach sensitive issues including the setting up of ERM2, the exchange rate system which comes into being next January and which Denmark and Greece have pledged to join.

The Austrian presidency also hopes to make progress on tax harmonisation proposals. Negotiations will take place over the issue of a withholding tax on savings.