John Major yesterday blocked practical progress towards a single European currency, preventing the Cannes summit from endorsing a design for notes and coins, and stalling a decision on how the currency will be launched.
European leaders restated their "firm determination" to prepare for European monetary union, agreeing again that 1999 is the most feasible target date for those countries which wish to proceed. However, as the European Commission has warned, time for preparations is ticking away, and political proclamations at Cannes were backed by no new ideas on how this monetary revolution will be achieved. Instead decisions were again delayed until the Madrid summit in six months' time.
As the summit closed, some informed Emu hawks showed the first signs of doubt about whether even the 1999 target date can be met.
If the planning is delayed into next year, the debate on monetary union could become embroiled in wider issues about the future of the EU, to be raised at the forthcoming Inter-Governmental Conference.
The Prime Minister's stubbornness, combined with new hesitancy among other member states, especially Germany, prevented the fast-streamers from persuading the summit to speed up practical preparation. It was also clear that some of Britain's partners were willing to ease Mr Major's path, in view of his political difficulties.
The leaders discussed a detailed Green Paper, prepared by the European Commission, which envisaged the phased introduction of the single currency, culminating in the circulation of notes and coins in 2002. But the summit produced no formal backing for the Commission's proposals, leaving scope for further debate. A ringing commitment to the single currency as "the most durable solution" to Europe's economic turbulence, contained in a draft statement prepared by the French Presidency, was struck out.
On some key issues the leaders even appeared to have reversed earlier, more positive decisions on how planning should proceed. At Versailles, finance ministers unveiled prototype coins. In Luxembourg last week they announced further agreement on what the single currency notes might look like. The French draft statement proposed endorsing these decisions. In the conclusions, however, all reference to work done so far on designing the currency was omitted.
For Mr Major any detailed decisions at Cannes on the single currency, in the midst of his leadership battle, could have been highly damaging. Even decisions by the European Monetary Institute, announced last week, stating that notes should be largely identical, with only tiny national symbols, were pushed aside.
Officials believe that while Mr Major led the argument against any firm new decisions, both France and Germany were content to put Emu on hold.
Since President Jacques Chirac came into office, France has shown less urgency for the single currency, while Germany has some objections to the Commission scenario.
Mr Major's achievement gives the government only a temporary breathing- space on the single currency. The political decision on which countries will proceed is due in January 1998, after the next British general election, which must take place by May 1997. It is hard to see how any Prime Minister could avoid a manifesto pledge to join or to stay out.Reuse content