Europe braced for radical shift on euro

Poll win for Jospin will strengthen lobby for `soft' currency

Europe is braced for a radical shift in the debate over future European integration and the construction of the single currency if the French socialists emerge victorious from Sunday's elections.

Lionel Jospin, the French socialist leader, who could be elected Prime Minister, would support a flexible interpretation of the Maastricht convergence criteria, allowing as many countries to join the euro-zone as possible.

Such an approach is certain to bring about a "soft euro", removing any doubts that both Germany and France would be able to meet the time-table for launch on 1 January 1999. The countries' difficulties in meeting the key budget deficit target of 3 per cent of gross domestic product would be removed by a political decision to allow them to exceed the limit by a few percentage points.

A "flexible" policy on the criteria would also open the way for Italy, and other marginal applicants, to join monetary union in the first wave.

Mr Jospin would insist on building up political control over the operation of monetary union in order to reduce the power of central bankers, allowing greater emphasis on promoting employment and growth.

The French socialist approach would put EMU watchdogs in the European Commission, who have repeatedly stated that the criteria would be strictly adhered to, on the defensive, creating a field-day for the sceptics who would accuse Europe of manufacturing a "fudge" in order to set up the single currency.

More dangerous, for the Euro's future, reducing the rigidity of the economic rules would run the risk of fuelling already intense public opposition to the single currency in Germany. Most ordinary Germans fear the prospect of sinking their strong mark into an inflation-prone soft currency.

Helmut Kohl, the German Chancellor, whose own difficulties in meeting the criteria were illustrated in the row over the revaluation of German gold reserves, would face a tougher task than ever as he attempted to maintain backing for his pet EMU project in the run up to German elections in late 1998.

However, calls for a more flexible approach to the single currency, along the lines suggested by Mr Jospin, have been growing across Europe.

The rigidity of the EMU convergence criteria, which demand strict control of public spending in each member state, has caused mounting public anxiety in several member states as the painful social effects of budget cutting has been felt.

Gordon Brown, the British chancellor, has opposed any "fudging" of the criteria, and the Labour government's view of a "social Europe" is at odds with the French socialists.

However, Britain has signalled its desire for more political input into European economic policymaking, by backing the inclusion of an employment chapter in the Amsterdam Treaty, and signing up to the social chapter.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Voices
Ed Miliband, Nick Clegg and David Cameron appeal to the audience during the Question Time special
voices
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
  • Get to the point
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 General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living