THE new French Socialist government has committed itself resolutely to the timetable and the Maastricht criteria for the euro. But it has asked fellow member states for more time before ratifying the stability pact agreed in Dublin.
The call at the European Union finance ministers meeting in Luxembourg yesterday prompted an adverse reaction on the markets. But diplomats and ministers here were expressing confidence that France was signalling that it does not want to rock the monetary union boat.
Attending his first meeting France's new minister, Mr Domimque Strauss Kahn, made clear to colleagues that France did not want to renegotiate the contents of the pact. However, France wants to complement it with new provisions to enhance job creation by increasing economic co ordination between member states.
The legal text embodying the pact, which sets out the way in which financial discipline would be enforced in the aftermath of the launch of the euro, was to be approved at the Amsterdam summit next week. The challenge of agreeing a new text on employment before then is huge. But ministers, led by the Finance Minister, Mr Quinn, told the French that, while they understood their problem and were willing to facilitate extra wording, it was important that Amsterdam send an unequivocal signal to the markets of commitment to the stability pact.
Mr Quinn and the Dutch Presidency of the EU were still hopeful last night that would include full ratification of the pact with a new protocol, but others were suggesting a political resolution, leaving the detail until later in the month, might have to suffice.
Today the Dutch Prime Minister, Mr Wim Kok, travels to Paris and the president of the European Commission, Mr Jacques Santer follows him on Thursday in a frantic series of last minute diplomatic exchanges ahead of the summit.
Mr Strauss Kahn's fellow ministers, although disappointed by the delay, welcomed the French commitment to the euro timetable. Many made clear that, although there could be no question of renegotiating the pact, the French request was not unreasonable.
The Dutch Minister, Mr Gerrit Zalm, on behalf of the presidency, stressed the need to move as fast as possible to reassure the markets but also made clear that "no one is prepared to change the stability pact".
"What has been agreed upon and discussed for two years can no longer be put up for negotiation," the German Finance Minister, Mr Theo Waigel, told reporters. Mr Waigel was notably understanding of the French position.
The Monetary Affairs Commissioner, Mr Yves Thibault de Silguy, said the request for parliamentary discussion did not threaten the launch date of January 1st, 1999, for economic and monetary union (EMU). And Mr Santer said he still hoped for a deal by Amsterdam.
Speaking to journalists, Mr Strauss Kahn echoed calls by Mr Santer for the fleshing out of Articles 102 and 103 of the Maastricht Treaty which require coordination between member states of their economic policies and the recognition that each country's policy was "a matter of common concern".
The clauses also provide for approval at EU level of the broad economic guidelines for the Union as a whole and the close monitoring of convergence programmes.
Mr Strauss Kahn said it was important to provide "equilibrium", an economic pole to balance the monetary pole" provided for in the independence of the European central bank and the monetary disciplines implicit in Maastricht. To do so, he said, would reinforce the credibility of the euro.
Speaking to ministers, he described the economy as a car - the stability pact was its brake, economic co operation, the engine which needed a retuning. The two issues had to be seen together, and he could not ratify the former without a commitment to the latter.
What the French propose is not altogether clear, however, and any move in a too interventionist direction is likely to be resisted, most particularly by the Germans.
The minister admitted they needed time to flesh out the proposals which would perhaps look to the labour market flexibility ideas put forward by the new British Chancellor of the Exchequer, Mr Gordon Brown, and the call for the completion of the internal market by Mr Santer.
