EU currency rules may be flexible
BRUSSELS, Belgium - The European Union's finance chief hinted Tuesday that rules for joining the planned single currency could be bent to let France and others join even if they fail to cut budget deficits to the required level.
EU Finance Commissioner Yves-Thibault de Silguy was quoted by his spokesman as saying the deficit criteria for participating in the euro currency should not be "applied brutally."
There was "a little leeway," he said, in interpreting the rules so European countries could take part in the Jan. 1, 1999, launch of the euro with deficits exceeding - but close to - the required three per cent of gross domestic product.
The spokesman, Patrick Child, said de Silguy, however, warned France had no automatic right of entry into the currency union.
The comments came amid indications France's new Socialist government won't cut spending or increase taxes enough to get its budget deficit down to three per cent by the end of this year.
EU leaders will select participants for the currency project next spring based on this year's economic performance.
Comments by French Prime Minister Lionel Jospin and his finance minister have led economists to predict France's budget deficit will be at least 3.5 per cent of its GDP.
The French government said last week that France should be allowed into the euro bloc if this year's deficit shows a downward trend from the 1996 level of 4.6 per cent.
But German Finance Minister Theo Waigel has insisted all countries hit the three per cent target, even though his country also is struggling to reduce its budget deficit. German officials fear any softening of the entry criteria will undermine the euro by letting in countries with lax public finances.
Germany and France, the EU's biggest economies, have been the driving forces in efforts by the 15-nation group to create a shared currency. |
