Letter: Hard- and soft-core currencies in EMU

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From Mr Walter Cairns

Sir: Your editorial on the difficulties facing the prospect of economic and monetary union in Europe (25 January) advocates relaxation of the Maastricht criteria as an alternative to postponing the 1999 deadline. In economic terms, there might be a case for such a step; in political terms, it could well be disastrous.

Ever since the Maastricht treaty came into effect, a number of member states have gone to inordinate lengths to meet the Maastricht criteria. This has in many cases involved severe public expenditure cuts and high interest rates, which is the price usually paid for any strict deflationary policy. This in turn has caused increases in unemployment and many bankruptcies of small-to-medium firms.

If these criteria are now relaxed for the sake of adhering to the 1999 deadline, there will be some very angry people among these victims, who will conclude that all the sacrifices made on the altar of EMU were not so necessary after all.

Yours sincerely,

Walter Cairns