Future of the mark worries Bonn MPs

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The Independent Online
WORRIES about the future of the German mark dominated the opening of the Maastricht ratification debate in the German parliament yesterday. MPs from all parties insisted that there could be no 'automatic move' to the third and final stage of currency union, and that the parliament must in 1996 have the last word before allowing Germany down such a road.

While the Finance Minister, Theo Waigel, and the Foreign Minister, Klaus Kinkel, emphasised the 'examinatory nature' of such parliamentary approval, others, such as Otto Graf Lambsdorff, leader of the Free Democratic Party, which is in the ruling coalition, insisted on a 'clear and new right of decision'. Mr Lambsdorff also cast doubt on the timetable for Maastricht and achieving currency union by the deadline of 1999.

Sensitive to the powerful fears in the population, provoked by the prospect of losing the mark for an unknown common Euro-currency, Mr Waigel sought to give reassurance that the stability of a 'future European currency will be, through the conditions laid down at Maastricht, even better secured than the deutschmark today'. He also emphasised that the mark would not disappear until some time into the next century.

'Even after the locking together of currencies at unchangeable exchange rates, the deutschmark, the franc, the guilder or other currencies will be able to continue side by side,' he said. Only at some later stage, he explained, would the 'purely arithmetic changeover to a common currency' occur, which the Finance Minister persisted in calling the Euro-mark.

With Chancellor Helmut Kohl not speaking in the debate, the rest of the task of defending the government's dented European vision fell to Mr Kinkel, who called upon the parliament to 'send a signal of faith to those of our partners still hesitating', meaning Britain and Denmark. He reiterated that Bonn had no interest in a two-speed Europe, and wanted all 12 members to attain the goal of European union.

While a number of MPs criticised specific elements of the treaties - and gave particular vent to the widespread feeling that it was negotiated 'over the heads of the people' - the overwhelming majority declared their support for ratification. Before the debate, Chancellor Kohl said that he expected Maastricht to be ratified with an 80 per cent majority. The treaties will now go to committee before returning for the second reading.

This continuing strong support by politicians, even if increasingly tinged with unease and doubt, is in stark contrast to the powerful scepticism prevalent among the population. According to the latest Allensbach poll, published yesterday, just 15 per cent of Germans think EC membership brings more advantages than disadvantages. Forty-seven per cent think that European union will be at the cost of individual countries, up from 26 per cent in 1990.

Over Maastricht itself, the nation is sharply divided, with 39 per cent supporting the treaties, 35 per cent opposing, and 26 per cent undecided. Nearly half of all Germans say that their country should 'pursue a leadership role in Europe', a dramatic switch from just a few years ago when a large majority favoured playing a more discreet role. Only 8 per cent felt confident that a common European currency would be as solid as the mark.

It is this point that has alarmed the business community, which is deeply unsure of Maastricht. More than 80 per cent of businessmen, according to a poll published yesterday, regard the treaties as 'flawed'. Just 40 per cent think a common currency makes sense, as against 59 per cent in 1989. Forty- nine per cent agree with the proposition 'our hard deutschmark is irreplaceable', up from 35 per cent in 1989.

The scepticism is strengthened by the weakening of the German economy, as key sectors hover on the edge of recession. The Statistical Office said yesterday that inflation continued to rise for the second consecutive month, reaching 3.6 per cent in September. In July the rate had dropped to 3.2 per cent, falling below 4 per cent for the first time in nine months, but then picked up to 3.5 per cent again in August. The Bundesbank is insisting on the need for high interest rates because of the difficulties in getting inflation down.

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