Kohl battles to curb mounting panic about loss of the mark

Monetary union: Campaign to woo public may be too late

SARAH HELM

On the noticeboard of the Finance Ministry in Bonn the posters display a confident message: "The single currency: as strong as the mark." Inside, however, confidence that the single currency will indeed be as strong as the mark is ebbing away.

The German political elite is bracing itself for the real possibility that the 1999 launch date may have to be delayed. Fears that France will not be ready continue to mount. Even if the target can be met, Germany is beginning to ask: "What about the day after?" Will the single currency sink under a flood of inflationary pressures?

Meanwhile, the insecurity of the German people about the loss of the German mark shows little sign of abating. Germany is to launch a big publicity campaign in the new year to convince the public, but many fear it may be too little, too late.

Chancellor Helmut Kohl refuses to concede publicly that the 1999 start date can be postponed, for fear of reducing the momentum among other states. Delay would be a devastating blow to his faith in the absolute need for greater European integration. While the German people fear the loss of the mark, symbol of their post-war success, the Chancellor feels it must be subsumed in a single currency to prevent history repeating itself. He believes an ever-stronger mark would intimidate neighbouring states, causing them to unite against his country.

Although some in Germany claim that a delay would not be disastrous, and that economic monetary union (EMU) would be back on the table in a few years, most European leaders know that postponing the single currency would raise fundamental questions about the whole future of the union. The case for greater political integration would be undermined, and the prospect of enlarging Europe to include new member states would recede.

The gap between Germany's public rhetoric about meeting the 1999 target and the private assessments of German officials is startling. In a series of discussions with the Independent, senior German officials and analysts spoke frankly of their doubts. One senior official in Bonn put the chances of launching EMU in 1999 at "fifty-fifty". Another said a delay of two or three years should be considered. A third said there was "still a chance" the target could be achieved, but it was slim. Some believe Mr Kohl may be forced to ask for a postponement as early as the second half of next year, when France's progress on meeting the economic tests can be gauged.

Jacques Chirac, the French President, has shown he is ready to take tough measures to bring down the budget deficit to meet the ceiling of 3 per cent of gross domestic product set for those wishing to join EMU. But as they watched last week's French strikes in protest against Mr Chirac's cuts, officials in Bonn had little faith Paris will succeed. "There is no leeway", one said. "It all depends on France. If France meets the test we will start. If it does not, it will not be worthwhile."

The German government hopes to reassure the public through proposals from Theo Waigel, the Finance Minister, for a "stability pact" to bind EMU member states to strict economic rules. But Bonn knows it cannot insure itself against political decisions taken by individual members in the future, or against the inflationary effect sudden borrowing in some countries could cause.

"We want precautions to prevent this. But of course there is no absolute guarantee that the single currency will be as strong as the mark," a senior finance official said.

Mr Kohl had hoped that Europe would move towards a federal-style political union in parallel with monetary union, giving Germans more guarantees of European co-operation and stability. But progress on political union is logjammed. The German public, meanwhile, is calling for every guarantee that it can get.

Discussion about the single currency has suddenly burst onto the streets, revealing deep fears and confusion. People are asking what will happen to their savings and their pensions.

"They are very confused. They don't even have a name for the currency," Martin Suskind, of the newspaper, Suddeutsche Zeitung, said.

Some analysts believe Mr Kohl may have resisted launching a public debate sooner, precisely because he feared it might reveal a groundswell of Euro- scepticism in Germany. He is widely expected to stand again in Germany's elections in 1998, when he would like to campaign as the unifier of Europe. But if the voters are still against the single currency when the campaign starts, he may have to heed their fears.

"Kohl's nightmare is that circumstances develop where he has no power to convince his own people of the necessity of the single currency or the union," Mr Suskind said. "Then the experiment would be on the edge of failing."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
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: Cleaner

£15000 - £16500 per annum: Recruitment Genius: If you've got first class custo...

Recruitment Genius: Mobile Applications Developer / Architect - iOS and Android

Negotiable: Recruitment Genius: This is a great opportunity to join a medium s...

Recruitment Genius: Telesales Account Executive - £40K OTE

£11830 - £40000 per annum: Recruitment Genius: Working in a friendly, sales ta...

Recruitment Genius: Web Designer

£15000 - £27000 per annum: Recruitment Genius: One of the UK's leading web des...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most