Delors stokes doubts over EMU target

1999 deadline: Prospect of keeping to timetable fades as Spain urges delay and French sound sceptical note

MARY DEJEVSKY

Paris

There were growing signs yesterday that the 1999 target date for European economic and monetary union may not be feasible, with even Jacques Delors admitting there may be difficulties in achieving it.

The speculation generated by Mr Delors intensified when Carlos Westendorp, the Spanish Foreign Minister, became the first European leader to suggest a mechanism by which the date for a single currency could be put back. The EU, he said, could simply consider "stopping the clock".

Until now, France has been one of the most fervent supporters of the project. But when Mr Delors, former president of the European Commission and an architect of the Maastricht treaty, says even he has serious doubts, the prospects for a single currency seem to dim, even though, on and off the record, senior French officials are adamant that nothing is amiss.

In the Bordeaux newspaper Sud-Ouest yesterday, Mr Delors referred to evidence of an economic slowdown in Europe and said: "The news from France and Germany is not reassuring. It will be difficult to achieve economic and monetary union within the agreed timetable [by 1 January, 1999]." Only four months ago, Mr Delors was insisting that the deadline could and would be met.

Mr Westendorp carries weight in the EU as the former chairman of the so-called "reflection group", which last year set the framework for EU reform. His comments and those of Mr Delors, both coinciding with the European Commission's publicity launch, added to speculation that key leaders are now preparing the ground to announce a delay. Mr Westendorp also suggested EMU should not go ahead without Britain, Italy and Spain.

Mr Delors is not the French government, or a member of any elected body in France, although he advises the Socialist opposition. As one of France's most faithful Europhiles and however, his words are noticed. In this case, they chimed with a Euro-sceptical tendency in France that seems to be edging into the open without apology.

The day before the interview appeared, doubts about the single currency were voiced by two other senior figures in France, both seen as supporters of the project. Jean Gandois, president of the main French employers' organisation, said if the January 1999 deadline were not met, "I wouldn't see it as a crisis; what is important is the movement towards a single currency ... not the calendar."

Marc Vienot, head of one of France's biggest banks, Societe Generale, was more forthright. Citing the slowing of economic growth, he described France's chances of meeting the single currency criteria as "negligible". The Maastricht treaty, he said, should be renegotiated.

The question is whether the government has set the single currency debate in train to prepare the public for a major change of policy. The prospect that growth in France could fall as low as 1.5 per cent this year, and the budget deficit prove impossible to shrink without risking social unrest, could make revision of the single currency timetable a tempting option.