Comment: The good ship EMU holed below the waterline

European finance ministers meeting in Valencia this weekend are ostensibly discussing a name for the new Euro-currency and practical details about how to manage the transition to it from the initial fixing of exchange rates and establishment of a European central bank on 1 January, 1999. They might just as well be rearranging deckchairs on the Titanic.

The reality is that a Europe-wide move to monetary union in 1999 now looks holed below the waterline. Despite Helmut Kohl's protestations, key interests within Germany have served notice that they will not be party to a cooked deal on the Maastricht convergence criteria that would include debt-laden and inflation-prone countries like Italy. Of those interests, none packs a bigger punch than the Bundesbank. Officially of course, the bank endorses the move to monetary union. Few doubt, however, that it is reluctant to conspire in its own demise.

As everyone knows, central bankers not only like to remove the punchbowl just as the party gets going, but they are also generally tight-lipped. Not so with the talkative bunch on the Bundesbank council in the past week. Scarcely a day has passed, it seems, without some further hardening in the bank's position on monetary union.

At the beginning of the week it was the turn of its president, Hans Tietmeyer, to insist that political compromises could endanger stability, that codeword for fiscal and monetary responsibility. At the end of the week, it was the turn of Gerd Hausler, a member of the bank's Frankfurt directorate, to raise the ante on sanctions against budget deficits after monetary union.

The Bundesbank does not always get its own way. Helmut Kohl rode roughshod over its opposition to his proposed terms of German monetary union. But it is on surer ground with European monetary union. Despite the common front of party political support and the backing of big banks and large companies for the project, the German public is not convinced: more than two-thirds are opposed to the plan to kill the mark.

On the current timetable, the decision on which countries will qualify for EMU will be taken either at the end of 1997 or in 1998. One factor to bear in mind is that the Bundesbank will be throwing a party - and providing the punchbowl - on 21 June, 1998 to celebrate the 50th anniversary of the mark. This is just ahead of the federal elections in October. It will be quite an occasion; the mark has come to be the totem of German economic regeneration since the War. Given the events of the past few days, that party doesn't look like turning into a wake.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Highs and lows of the cast's careers since 2004
New Articles
i100... with this review
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam