OECD deficit forecasts jolt EMU launch hopes
Saturday 04 May 1996
French and German budget deficits will be above 3 per cent of gross domestic product in 1997, the year on which a country's economic performance will be judged, according to forecasts from the Organisation for Economic Co- operation and Development.
Should France and Germany, the countries leading the drive towards the single currency, fail to meet the criteria, the 1999 launch date would have to be set back.
The decision on which countries qualify to join European Monetary Union is to be taken in early 1998, on the basis of the 1997 results, and both Germany and France have so far resisted any moves to weaken the criteria.
The OECD forecasts, to be published shortly, were confirmed yesterday by Jean-Claude Paye, the secretary general. Although Mr Paye refused to give precise figures, he said: "The forecasts which have been made give something above 3 per cent for 1997."
The European Commission, which is due to publish its own economic forcasts on 15 May, showed no sign of concern over the OECD results, insisting that there was no reason to believe that the deadline for launching the single currency could not be met by Germany and France, as well as several other EU states. "We remain confident that there will be a significant number of countries ready to participate in monetary union in 1999," a Commission spokesman said.
However, the Commission's own forecasts are being awaited with some nervousness in Paris and Bonn. Germany already faces the prospect of Commission sanctions after overshooting the deficit limit for 1995.
Both France and Germany are certain to insist that the gloomy predictions can be overturned by new drives to cut public spending. French officials are talking of "draconian" measures to curb spending and list plans to limit spending increases to the rise in inflation over the next four or five years.
Recent German spending cuts have aimed at public savings of about 50bn marks (pounds 22bn) in 1997 and include deep welfare and tax cuts.
- 1 Tidal launch: The most pretentious lines from Alicia Keys' valedictory speech
- 2 Trevor Noah: Jon Stewart's replacement faces online criticism over 'anti-Semitic' tweets
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 Martha Stewart accuses Snoop Dogg of 'smoking for four hours' during Justin Bieber Roast
- 5 Gamers confess the worst things they've done in The Sims
Prince Charles ‘burns 1.3 tons of carbon’ in private helicopter after urging public to turn off lights for Earth Hour
Martha Stewart accuses Snoop Dogg of 'smoking for four hours' during Justin Bieber Roast
April Fools' Day 2015 live: The best pranks and fake stories from around the world
University of Cambridge: Remains of 1,300 scholars are found under building
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...