Experts back 87% chance of EMU on time

A week of "being nice to Italy" led economists to give firmer odds on a punctual monetary union. The Independent's panel of experts now believe there is an 87 per cent likelihood of European monetary union being launched on 1 January 1999.

Economists said a Monday meeting of EU finance ministers calmed worries about Italy's national debt. At 120 per cent of GDP, Italy's debt is double that required by the Maastricht criteria.

Ministers made favourable remarks about Italy's economy in an effort to repair any damage caused by negative remarks from the Netherlands. The Netherlands government had questioned Italy's ability to stay within the Maastricht rules.

Hans Tietmeyer, chairman of the Bundesbank, moved to quell speculation he was opposed to Italy's entry. Last weekend, in an interview with the German magazine Focus, he expressed doubts about the suitability of "high- debt" countries. He later said he had no specific country in mind.

Julian Jessop, economist a Nikko Europe, said the euro currency would be undermined if politicians ignored the evidence about Italy.

- Andrew Verity