Ministers to buckle euro into timetable
Wednesday 02 April 1997
Agreement on the outline timetable, expected to be reached by European finance ministers meeting on Saturday in the Dutch town of Noordwijk, will demonstrate, once again, the enormous political will to drive the Emu process forward.
The ministers will use their informal meeting to scupper speculation about a very different kind of timetable - for a single-currency delay.
The decision on how many countries join the euro will be the most crucial moment in the Emu build-up, and many fear it could prove highly divisive, particularly if Italy, Spain or Portugal are rejected.
A final ruling on qualifiers in late April - instead of earlier in 1998 as central bankers had wanted - could boost credibility of the Emu project, by buying more time for the southern Europeans to make the grade.
However, the later the decision date, the more problems could be caused in the final months. Late April gives countries which do qualify just eight months to prepare for the launch on 1 January 1999.
Britain will hold the European Union presidency during the crucial first six months of 1998, and therefore may be able to exert some influence over how the Emu timetable unfolds.
However, any incoming British government will have to face up to the overwhelming domestic political choices on whether Britain should choose to join Emu, and whichever party wins the election will have little time to sit on the Emu fence. Given the tightness of the timetable, it appears increasingly unlikely that any British government would be able to prepare in time for the 1999 launch.
The Labour manifesto, to be published today, will signal new Labour doubts about Emu, talking of "formidable obstacles" to be overcome if membership of the first wave is to be considered.
Even if a British government should wish to be considered for the first wave, it would first have to meet several conditions, including passing legislation to create an independent central bank. And it would have to pass legislation on a referendum.
The highly controversial question of whether membership of the Exchange Rate Mechanism should be deemed to be a condition of membership has still not been finalised. The ruling on who qualifies will be based on the economic results for 1997 - and central bankers wanted the decision as early as possible.
Several member states, however, have recently been pushing for more time. France has pushed for the decision date to be set after the French parliamentary elections in March.
In Noordwijk the finance ministers are expected to decide that two key economic reports on member states should be ready by the end of February 1998. These reports, from the European Commission and the European Monetary Institute, the central bank-in-waiting, will go to European finance ministers.
Six weeks later - by late April - heads of government will make their final decision.
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