FRANCE and Germany, leaders in the drive to monetary union, vowed yesterday there would be no delay to plans to launch a single European currency in January 1999.

"The timetable for economic and monetary union will be respected. I have no doubt about that," the French Finance Minister, Mr Jean Arthuis, told a news conference after a meeting with German Finance Minister, Mr Theo Waigel, and the central bank heads of France and Germany.

"There is no reason to talk about the timetable. Germany is trying to meet the [Maastricht] criteria and let's see what the result is," the Bundesbank president, Dr Hans Tietmeyer, added.

The meeting, part of a regular series between Europe's two biggest economies, took place amid resurgent speculation that EMU might be delayed to give Germany more time to meet Maastricht treaty criteria.

Private economists say they doubt whether Germany, meant to be Europe's model economy, can reduce its budget deficit to 3 per cent of gross domestic product this year, in line with Maastricht treaty requirements.

Mr Arthuis, however, said he was confident both France and Germany would be ready for monetary union.

"France and Germany are firmly committed to cutting public deficits. They will respect in 1997 the criteria in the treaty and the timetable agreed to in Madrid in December 1995," he said, referring to a summit in the Spanish capital which reaffirmed January 1st, 1999 as the start date for EMU.

"This timetable will be respected. We have no doubt whatever on these points and I want to remind you of this forcefully," Mr Arthuis said.

He said economic prospects were good in France and Germany after a temporary slowdown last year and added that he expected growth close to 2.5 per cent this year.

Mr Waigel also dismissed speculation about what might happen if Germany or France failed to qualify for monetary union.

"We now have a chance to use our growth oriented policies to achieve our goal," he said. Talk of alternatives to the euro "are not productive and not necessary", he said.

France and Germany also used the talks to press ahead with detailed plans on how EMU will be run after 1999. Both reaffirmed their support for an informal "stability council" to co ordinate policies inside the euro zone after the launch of the single currency.

The idea came under attack earlier this year, notably from some members of the Bundesbank, who feared it might be used to undermine the independence of the future European Central Bank. The French finance minister said he and Mr Waigel had also agreed on the need to press ahead with efforts to get rid of tax anomalies in the European Union which create unfair competition.

He said there should be a code of good conduct to prevent countries gaining an unfair competitive advantage from their tax legislation and promised to press the European Commission to take action on the issue.

"We cannot tolerate these forms of unfair competition. It is the future of the European Union which is at stake," he said.