Storms ahead for monetary union

It has been a rather quieter week for monetary union watchers after the recent shocks involving Bank of England independence and German gold stocks, but it is likely to be the calm before the storm.

Next week sees Italy launch its next three-year economic plan, which will test its ability to adhere to EMU targets, but more important still will be tomorrow's first round of voting in the French elections, whose outcome could set the seal on whether the whole project goes ahead on time.

Opinion polls, now banned until the final results are known, show the centre-right government with a fairly comfortable lead, albeit drastically reduced from its current 367 seat majority.

The expectation in the markets is that Alain Juppe and his Gaullist-led coalition will show a stiffer resolve in holding to the strict criteria for monetary union that the Germans want than their socialist opponents. Unanimity between France and Germany would vastly increase the chances for the project kicking off in 1999 as planned.

But the waves from last week's decision by Germany to revalue its gold stocks continue to lap around EMU. The move has been widely condemned, not least from within the country itself, as a piece of creative accounting to let Germany off the hook when it became clear that its public deficit this year will comprehensively bust the 3 per cent of gross domestic product laid down by the Maastricht Treaty.

With Chancellor Helmut Kohl now apparently backing down from using revaluation as a deficit reduction device, at least this year, the implications for EMU remain opaque.

In the midst of this uncertainty, the broad consensus among our panel appears to be edging further towards EMU arriving on time, but in what form still remains unclear. Robert Lind of ABN Amro says the revaluation "sent a clear message that the German government will do whatever it can to meet the Maastricht convergence criteria."

Like Darren Williams of UBS and Julian Jessop of Nikko Europe, he believes the move makes it difficult for Germany to argue that apparently less economically rigorous countries like Italy should be excluded. At the same time, many of our panel point out that it is becoming increasingly likely that "peripheral" countries like Spain and Portugal will have to be included.

Start your day with The Independent, sign up for daily news emails
News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
News
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower