Monetary union 'will not be delayed'

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The Independent Online
IN A determined effort to sweep away all doubts about monetary union, Europe's finance ministers yesterday proclaimed the 1999 target date sacrosanct, and insisted that the change to a single currency will come about.

Meeting in Valencia, the ministers scotched speculation about a possible delay. They took practical decisions over how and when the switch would happen, and reaffirmed that notes and coins would be introduced three years after the launch.

"We have agreed a strong message of engagement," said Jacques Santer, President of the European Commission. "This meeting has removed all ambiguity and incertitude. We have confirmed that the launch date of 1 January 1999 will be respected."

However, the public proclamations were somewhat undermined by the ministers' reluctance to decide a name for the currency. The "Euro" is fast gathering favour as the most likely name, but ministers yesterday deferred a decision until December.

Yves Thibault de Silguy, Economics Commissioner in Brussels, announced that the European Commission will launch a Europe-wide advertising and education campaign in January. He called on finance ministers to confirm the name by the end of the year so the publicity campaign could go ahead.

Ministers avoided any reference to the most serious question hanging over the single currency - whether France will meet the economic tests set down in the Maastricht Treaty. Without France, it is highly unlikely European monetary union (EMU) will go ahead. Much will depend on the determination of Jacques Chirac, the French President, to take unpopular economic decisions.

The new drive to achieve the 1999 target for the launch of EMU, beginning with the locking of exchange rates, is also certain to put fresh pressure on Britain to declare whether or not it will join the single currency. Britain has the right to opt out of monetary union. But yesterday Kenneth Clarke, the Chancellor, was determined to keep Britain in line for a switch to the single currency, should the decision be taken to join up. He reaffirmed that Britain is taking a full part in the practical preparations.

By the time EMU is launched, Britain would certainly have passed the economic tests, he said: "Britain will be regarded as a desirable member by the countries going ahead because of the strength of our economic performance."

Before the Valencia meeting, there had been speculation that the finance ministers might consider delaying EMU, or changing the economic criteria.

Yesterday, however, Alexander Lamfalussy, president of the European Monetary Institute (the European central bank-in-waiting), ruled out any change in the economic pre-conditions.He said the decision on which countries had passed the economic tests to join would be taken in early 1998, on the basis of 1997's figures. One year later - as near to 1 January 1999 as possible - those countries that do go ahead will lock exchange rates and the planned European Central Bank will start operating a single monetary policy.

From this time on, ordinary banks will conduct business with the central bank in the new Euro currency. However, Mr Lamfalussy said it was agreed that notes and coins would not be distributed to the public for a further three years. National currencies would remain legal tender for another six months.

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