Au contraire, the Brits have chosen to be non-starters in that goddamned EMU thing. Blimey! Those limeys let you down! Hey, Ma'am, what a blooming disappointment, isn't it?
Germany, Italy and France on target for EMU
(extracted from reuters.com
By Ian Geoghegan
BRUSSELS -
Germany, Italy and France came through with better-than-expected 1997
deficit figures on Friday that should ensure a timely launch of Europe's
ambitious single currency project with 11 start-up members.
It means national treasury officials have done their job and politicians will
now take the lead in shaping economic and monetary union (EMU) for
its scheduled January 1999 kick-off.
The European Commission and European Monetary Institute will both put forward their recommended starting line-up on March 25, with European
Union leaders expected to endorse their choices at a special EU summit
on May 2-3.
Germany, key to the EMU endgame because of pending legal challenges to its participation,
announced a 1997 deficit of 2.7 percent of gross domestic product (GDP), well below
analysts' expectations of 2.9 percent.
Under the criteria of the Maastricht Treaty EMU hopefuls must have achieved a 1997 deficit
at, below or close to three percent of GDP and show that such a level is sustainable in 1998.
"Sustainability must lie at the heart of a strict interpretation (of the criteria)," German Finance
Minister Theo Waigel told a news conference in Bonn.
Italy, whose economic readiness for EMU has been under closest scrutiny, announced a
deficit of 2.7 percent of GDP, lower than the 2.85 percent forecast just a month ago.
France said its deficit was exactly 3.0 percent of GDP.
Deadline on Friday
Friday was the deadline for EU states hoping to sign up to EMU to submit to the bloc's
Eurostat statistical agency the data that will nominally form the basis for their EMU selection.
German Chancellor Helmut Kohl weighed in by reaffirming EMU would start on time and the
euro would be stable.
"I am certain that the euro will come punctually as planned...it will be a stable currency just as
we have grown accustomed to with the mark for almost 50 years," he said.
Foreign Minister Klaus Kinkel took a swipe at the EMU-sceptics who have warned of currency chaos and rising joblessness in a post-EMU Europe. "This success refutes the euro
pessimists," he said.
Finland, announcing a deficit of 0.9 percent of GDP, became the tenth country to announce it had come under the three percent target laid down in the Maastricht Treaty.
TheNetherlands was expected to show a deficit of around two percent later on Friday.
The picture on member states' debt remains mixed, however.
The treaty says EMU starters must have gross debt at, or approaching 60 percent of GDP at
a significant pace.
Italy, which along with Belgium is furthest from meeting this target, said its debt fell to 121.6
percent of GDP last year, while Germany's debt rose to 61.3 percent, although Waigel
stressed it would fall in 1998 to 61.25 percent.
France maintained its debt below the 60 percent threshold, one of only four EU countries to
do so -- a factor behind why the debt target has become less important than the deficit
number as EMU's launch looms.
Greece missed the 1997 budget deficit and debt targets, but noted improvements on both
counts and is making headway to its possible inclusion in EMU by 2001.
An EMU non-starter
Britain, another definite EMU non-starter -- of its own choice -- along with Sweden and
Denmark, announced a big drop in its 1997 deficit to 1.9 percent of GDP, compared with 4.8
percent in 1996. Gross debt last year was 53.4 percent of GDP, again comfortably within
EMU qualification parameters.
Analysts said Friday's data, and numbers released earlier this week, only confirmed
expectations EMU will go ahead in a little over 300 days with 11 countries.
"It's basically good news," Liesbeth Van De Craen, economist with Bank Brussels Lambert
said.
"As Portugal, Spain and Belgium showed good data as well, all countries are on or below the
three percent for the budget deficit criterion and should be pretty safe to be elected (for
EMU) on May 2."
She said the Commission's March report was a foregone conclusion and markets would now
focus on a separate German Bundesbank convergence report to be published on March 27.
"The Bundesbank report will probably be most important for the judgement of the German
parliament," Van De Craen said, referring to a vote on Germany's participation in EMU that
the upper and lower houses of parliament are due to deliver at the end of April.
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