Germany lays plans for EMU breakdown

TONY BARBER

Europe Editor

Fresh doubts over the prospects for European monetary union arose yesterday after a senior German politician indicated his government was making contingency plans in the event that the single currency did not start as planned in 1999.

In remarks published in the Wall Street Journal, Wolfgang Schauble, the leader of the ruling Christian Democrat party admitted that the German government had considered what it might do if the deadline was not met, but stressed that he believed it was still possible for monetary union to be launched in January 1999. He warned that if politicians began to talk openly about delaying the project, "people will no longer believe that it can be done".

However, Eddie George, the Governor of the Bank of England, warned last night that forcing a single currency on European economies before they were ready could be destructive to the EU. Speaking on the BBC TV news, Mr George said: "I think there are genuine risks that it could prove to be divisive and actually lead to a loss of coherence in Europe rather than to strengthen Europe as a co-operative entity."

Mr Schauble, seeking to defuse the controversy, said in a statement yesterday that a decision was years away: "The government has always said the decision on which countries will take part in EMU will be made in 1998 as laid down in the Maastricht treaty." However, he added: "We have never left any doubt that both the criteria for EMU and the timetable must be adhered to. But if in 1998 there is a conflict between timetable and criteria, it should not be resolved at the expense of the criteria."

Debate over the shaky prospects for EMU is polarising between those who think that monetary union should go ahead even if the economic criteria are not strictly met, and those who think that in such a case, the timetable should slip.

The prime ministers of Belgium and Portugal suggested yesterday that the single currency would go ahead on schedule even if some countries did not strictly fulfil Maastricht conditions on deficits and public debts. Antonio Guterres, Portugal's Socialist Prime Minister said there was "no chance" for monetary union if such allowances were not made.

He was referring specifically to Belgium, which the European Commission predicts will have public debts totalling 130 per cent of gross domestic product next year, far in excess of the Maastricht requirement of 60 per cent. Mr Guterres said monetary union would not be politically feasible without Belgium's participation.

The Belgian Prime Minister, Jean-Luc Dehaene, said he was confident his country would be a founding member of EMU, despite having the highest public debt of any EU state. "It is the main objective ... of my government," he said.

A growing number of senior EU politicians argue that the EU must be more flexible in interpreting the Maastricht criteria if monetary union is to start on time. However, the German government fears that, if it gives way on this point, German voters may turn decisively against the Euro, as the single currency was provisionally named in December, suspecting that it will be weaker than their much-prized mark.

The President of the European Commission, Jacques Santer, said he expected seven to nine of the EU's 15 member-states to meet the January 1999 deadline. "I think there will be a critical mass of nations that will at least match Japan in terms of gross national product strength," he said.

Mr Santer also challenged those who assert that the struggle of EU governments to meet the Maastricht criteria is killing efforts to reduce unemployment. "Monetary union is a weapon in the fight against unemployment," he said.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
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

Solutions Architect - Permanent - London - £70k DOE

£60000 - £70000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

General Cover Teacher

£110 - £130 per day: Randstad Education Reading: Great opportunities for Cover...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?