France throws weight behind Emu schedule
Single currency stays 'on target'
Monday 09 June 1997
After the gathering, Ireland's Finance Minister Ruairi Quinn said the "clear" message was that Emu was still on target despite uncertainty over the new French administration's economic policies.
"The French confirmed their position that they are for the date and the euro," he said. "The clear underlying message tonight was that Emu was on target. The momentum towards a single currency was being maintained."
The bullish mood was reinforced by the Italian Finance Minister, Carlo Azeglio Ciampi, who insisted members had underlined their desire to see economic and monetary union start on time.
Doubts over the direction of French policy had raised speculation about the future of plans for a single currency to fever pitch.
The apparent decision of the 15 ministers to reaffirm their commitment to the launch of a strong euro on 1 January 1999 was an attempt to dispel doubts cast by the Socialist victory in the French elections and by Germany's budgetary crisis. Any sign of cracks would have been seized on by the markets as confirmation either that a delay is inevitable or that the euro will be launched on time as a weak currency. But as they arrived in Luxembourg - officially for a dinner to discuss designs for the eight euro coins - there had been no clear statement from Paris on the Jospin government's intentions.
All eyes will be on Dominique Strauss Kahn, the French Finance Minister, who will be asked today to clarify whether he is serious about pre-election job creation promises which would clearly be in conflict with the expenditure- slashing criteria enshrined in the Maastricht treaty. He will also be grilled on France's commitment to the stability pact, which will ensure strict budgetary austerity in the euro zone after the launch.
Mr Jospin has so far floated signals that he wants to unstitch agreement on the rules of the pact, negotiated painstakingly in Dublin last December, to allow more emphasis on employment. Diplomats pointed hopefully to the absence of any formal demand by the French for a reopening of negotiations but admitted that backsliding now could be fatal. "Meeting the Emu deficit targets ... is one thing but the stability pact is critical - it is what will give the whole thing credibility and cohesion ... If you don't have that you can throw your hat at it," said one source.
Theo Waigel, the German Finance Minister who designed the stability pact, will also have to set minds at rest today as to whether Bonn itself can meet the Emu entry conditions on time. He is meeting European colleagues for the first time since the debacle over his plans to revalue Germany's gold reserves and use the profits to plug a gaping hole in the budget deficit.
t Robin Cook yesterday opposed moves by the newly elected French government to ease the economic criteria for countries to join a "softer" single European currency. The Foreign Secretary made it clear that he believed the election victory for the Socialists under Lionel Jospin and the attempt by the Germans to revalue their gold reserves had raised doubts about the single currency starting on time.
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