UK fights for single currency review

EMU in crisis: Tory ministers hope high-level rethink will prepare ground for public debate on postponing 1999 launch date
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The Independent Online
The British government is engaged in a diplomatic offensive to force a review of plans for a European single currency, possibly at the next EU summit in March.

The strategy explains the forecast by a senior government minister last week that plans for European Monetary Union by 1999 could collapse "within weeks". The comments were repeated publicly, in scarcely less forceful terms, by the Foreign Secretary, Malcolm Rifkind, at a press conference during a meeting of EU foreign ministers in Brussels yesterday.

Ministers hope such a review would prepare the ground for the first public debate about a possible postponement of the 1999 launch date. Foreign Office lawyers have advised them that a postponement would not necessarily involve rewriting the Maastricht Treaty, as the European Commission claims. But if the majority decided that the treaty did need to be rewritten, "it could be done in five minutes", said one senior official yesterday. "The real issue now is making the political decision about postponement," said another British source.

The Government, which has a vested domestic political interest in EMU postponement, does not wish to be seen to be dictating to its EU partners. Nor is it tabling formal proposals for a special summit. The review could even take place at another EU meeting already scheduled for this year, officials said. However, ministers believe that, given the mounting uncertainty over EMU, such a review should be held as soon as possible and preferably at the level of heads of government.

There were strong indications yesterday that Britain would like its EU partners to put the review on the agenda of the next summit, to be held in Turin in March, to launch the inter-governmental conference on reform of EU institutions. French and German leaders continued to rebut British scepticism about monetary union, showing signs of anger and irritation at what many see as British attempts to undermine the project. Werner Hoyer, the deputy German foreign minister, warned against "talking monetary union into the ground". Herve de Charette, the French foreign minister, said France would make every effort to be ready to join the single currency in January 1999.

The EU Monetary Affairs Commissioner, Yves-Thibault de Silguy, insisted once again yesterday that most member states would be ready for monetary union by next year - the test year for countries wishing to take part. "Barring an economic or political cataclysm, France, Germany and a majority of EU states will be ready at the end of 1997," Mr de Silguy said in an interview with the French newspaper Le Figaro. He added that to fail, forcing a renegotiation of the Maastricht treaty on European unity and damaging progress toward a single European market, would be "a catastrophic scenario that I do not dare even to imagine".

But Mr Rifkind, in his television and press conference comments yesterday, questioned the credibility of the project in the most strident terms. He urged his partners to "provide more than statements - more than assertions" that EMU would go ahead as planned. He added: "It is difficult to retain the credibility of the timetable for monetary union simply by statements of intent. We need something stronger than that."

Mr Rifkind strongly hinted that Turin could be the forum for such a debate, saying that discussion of the future of the single currency would become increasingly a priority "over the next few weeks".

There is no sign yet that either Germany or France would agree to reconsider EMU, which they insist must proceed on the basis of the timetable and a set of fiscal and economic membership rules agreed at Maastricht in 1991. The view in Bonn and Paris is that, while questions may be raised on the fringes, governments must hold the line or confidence in the entire project will collapse.

Mr Rifkind came close to accusing his partners of deceiving their publics by blind adherence to rhetoric. "Each day almost, senior European statesmen from France, from Germany, from Spain, from other countries express doubt or uncertainty as to whether 1999 is a realistic target. I doubt if this can go on day after day, week after week, without some serious credibility problem," he said.