Santer declares war against advocates of EMU delay
By Toby Helm, EU Correspondent in Brussels, and Bruce Johnston in Rome
JACQUES SANTER, president of the European Commission, declared war yesterday on the growing band of senior politicians and economists calling for monetary union to be delayed.
"I declare war on all the pessimists who think that the [Maastricht] criteria will not be fulfilled," he said in an appeal for Europe to hold its nerve over EMU.
His comments reflect anxiety in Brussels and Bonn that public support for the planned launch on Jan 1, 1999, is draining away.
"There is a date; there is a commitment. I expect the member states to stand by that commitment", Mr Santer said in a speech in Luxembourg. "We should put the horse before the cart and not the other way round."
His remarks came after a top German economist joined the chorus of experts admitting that Germany - the linchpin of EMU - will not pass the economic entry tests, and Lamberto Dini, Italy's Foreign Minister, fuelled speculation of delay.
Prof Herbert Hax, the head of Germany's team of "five wise men" which advises the Bonn government, suggested that EMU should be delayed because Germany would not meet the criteria for its annual deficit or public debt.
"Either you weaken the criteria or Germany will be ready for the euro later," he told the German newspaper Bild am Sonntag. "If you stick seriously to the stability criteria, Germany will not be able to introduce the euro in 1999 as planned." Prof Hax said it was essential not to bend the rules for the sake of hitting the deadline. The strength of the euro was more important than the date of launch. "Stability is more important than the timetable."
Despite the new wave of scepticism, Mr Santer struck a highly optimistic tone, arguing that economic trends were favourable. "The convergence situation in Europe has improved enormously over the past few years.
"For the first time in decades we have a situation that combines monetary stability with sound underlying economic conditions. Growth is clearly picking up in the Union . . . On Jan 1, 1999, we shall move to the euro."
Mr Santer spoke out after Chancellor Kohl was forced at the weekend to issue a statement insisting that the criteria would be met, allowing EMU to proceed on time. But Mr Kohl is also facing growing calls for a delay from powerful trades unions in Germany.
Soaring German unemployment - now 4.7 million, the highest since Hitler came to power - has convinced union leaders that the timetable may have to be put back to protect jobs.
There are also clear signs that Italy's political leaders are allowing talk of a postponement. Speaking in Venice at the weekend, Mr Dini chose his words carefully, saying that, while he foresaw no delays, "it would be better to have another year to be able to realise EMU".
Mr Dini, a former prime minister and director-general of the Bank of Italy, told reporters: "Towards the end of the year, we shall be in a position to understand whether there will have to be a brief delay in the decisions [over which countries are eligible for EMU ]".
Countries wanting to join the single currency in 1999 are supposed to have met the economic criteria on deficits, debts, interest rates and inflation during 1997. There are fears in Rome, Paris and Madrid that the lira would plummet, with disastrous consequences for the entire European economy, if Italy were excluded.
Such fears are leading many to the conclusion that it would be better to launch the project only when Italy, Spain and Portugal are ready.
Both Mr Kohl and Mr Santer now appear to be fighting a losing battle against the advocates of delay. Kenneth Clarke, the Chancellor, said recently that delay was now "likely".
If Germany cannot pass the entry tests, monetary union could not go ahead without Europe's leaders agreeing to bend the Maastricht rules.
Doubts over the single currency are beginning to surface even in countries where support has until now remained strong. Renault's decision to lay off 6,000 workers in Belgium and France has caused dismay among workers, causing them to link preparations for EMU to rising unemployment in the European Union. The jobless total in the EU is now approaching 20 million.
Mr Santer's efforts to hold the line rest on economic progress in the next two months. If unemployment in Germany continues to rise and growth remains slow, many experts recognise that delay is inevitable.
But those who argue against a delay believe the momentum that countries have built up in reforming their economies would be lost if the clock were stopped.
They believe European integration would be dealt a perhaps fatal blow if there were a pause in the federal march. A delay would, they say, be tantamount to admitting that Europe lacks the resolve and the will to meet the ambitious targets it sets itself.
