Senior members of the German government fought to restore confidence in the euro yesterday, following an unprecedented assault on monetary union by an influential group of academics. "A European stability culture has been achieved; time is ripe for the start of monetary union," Chancellor Helmut Kohl thundered. The new currency, in case anyone was wondering, was "in Germany's interest".
Mr Kohl was responding to calls at the weekend by 155 economics professors that Emu should be delayed. In a letter sent to the Financial Times and the Frankfurter Allgemeine Zeitung, the academics had demanded an "orderly postponement" of Emu, beyond its official launch date next January.
The professors, drawn mostly from the top universities of Germany, say they have no quarrel with the project itself, only with its timing. In their view, the countries applying to join Emu have not done enough to consolidate their finances. The two biggest potential members, France and Germany, are lambasted for being unprepared "to cope with the more rapid structural change and stiffer competition in a monetary union".
"Nonsense," countered the government chorus. Theo Waigel, the Finance Minister, was wheeled out to reassure Germans that, against all expectations, his budget last year had not strayed from the straight and narrow of the Maastricht criteria.
Klaus Kinkel, the Foreign Minister, followed the hymn sheet with religious devotion. "I am as sure that [Emu] will be launched as I am of hearing `amen' in the church," he affirmed. Otherwise, "the exchange rate of the Mark would soar, our exports would collapse, the economic upturn would be choked off and jobs would be endangered."
It is not only government officials who equate the academics with horsemen of the apocalypse. "The professors are playing with fire at the petrol station," said Norbert Walter, chief economist of Deutsche Bank.
"This manifesto will add to unease among the population. Together with the rising unemployment, it may be an explosive combination."
Professor Walter, like his colleagues at other leading institutions and the Bundesbank, did not sign the letter. He feels that the authors of the manifesto are "out of touch with the interaction of economics and politics". "They don't realise that the nations of Europe would be at each other's throats if the euro were delayed."
For the moment, the prospects of a delay are regarded as rather slim. The financial markets kept their cool yesterday, but are watching events closely.
An erroneous report at the weekend that four other professors had made progress with their legal action against the euro in Germany's highest court had already sent a shiver through Frankfurt.Reuse content