German left takes up new slogan: delay EMU

Single currency: Social Democrats make election issue of worry that Maastricht criteria will trap country in recession
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The Independent Online


The well-mannered debate in Germany over European monetary union is rapidly degenerating into a party political brawl, as the opposition Social Democrats prepare to turn it into an election issue.

The project, which has earned the contempt of the majority of Germans and sown division within the government, is about to be ambushed by the once Euro-friendly SPD. For next month's regional elections in Baden-Wurttemberg, the party has produced a poster with the words: "Stability and jobs have priority now. Postpone EMU."

Though the slogan is not exactly snappy, it is certain to catch on. The combination of falling government revenue in the middle of an economic downturn and rising unemployment is suddenly shifting the focus to the shackles imposed by the monetary union criteria. No longer concerned about the abolition of the German mark, the opposition now argues that the 3 per cent limit on the government's budget deficit - one of the conditions for EMU membership - will prevent Germany from spending its way out of recession.

Today the government is set to announce that unemployment has passed 4 million - a figure not reached since the dying days of the Weimar Republic. As the economic slowdown closes down factories in Germany's industrial heartland, Chancellor Helmut Kohl will come under immense pressure to cut taxes and boost spending, sweeping aside the Maastricht criteria for the sake of the national economy.

The constellation of forces ranged against the Chancellor's increasingly lonely crusade for the European single currency now embraces almost the entire political spectrum, from the Christian Socialists of Bavaria on the right to the SPD and Greens on the left. Though the national SPD leadership officially supports EMU in 1999, the Eurosceptics are beginning to gain the upper hand.

Oskar Lafontaine, the party's leader, is a recent convert to the cause of postponement. On the surface, he appears to back Mr Kohl's insistence that the Maastricht criteria must be met by all participating countries. But, unlike the Chancellor, Mr Lafontaine says it is better to tinker with the timetable of monetary union if member countries cannot meet the targets, and his EMU vocabulary has been enriched in the past few days with the word "jobs".

Bitterness about the European project was evident in a statement issued by the SPD yesterday to mark the fourth anniversary of the signing of the Maastricht treaty. The SPD's spokeswoman on Europe, Heidemarie Wieczorek- Zeul, the party's leading Europhile, lamented the lack of a Europe-wide policy on employment, pointing out that economic integration has produced 18 million jobless in the EU. Though she avoided the word "postponement", it was clear that the SPD would not permit a relaxation in the rules of membership. Since Germany itself is finding it impossible to meet the targets, the implication of this policy is that Europe's largest economy will not be allowed to join up in 1999.

Similar conclusions are being drawn on the government benches, though few dare to voice their fears in public.The last person to do so, Wolfgang Schauble, the leader of Mr Kohl's parliamentary group, was forced to eat his words a day later.

Mr Schauble had said that the government would consider postponement on the eve of the project. Not so, retorted the Foreign Minister, Klaus Kinkel: "The German government remains unreservedly intent on introducing the third stage of economic and monetary union on time on 1 January, 1999." Witnesses claim Mr Kinkel appeared to adopt the posture of an ostrich as he made his remark.