GERMANY'S Chancellor, Dr Helmut Kohl, attempted yesterday to defuse a row within his governing centre-right coalition over the future of the euro by repeating his commitment to a strict interpretation of the Maastricht criteria.
Chancellor Kohl, going on the offensive against his critics, said Germany would meet the 3 per cent deficit-to-GDP target for Europe's single currency and its 1999 deadline. Dr Kohl has until now avoided taking the hardline position that the 3 per cent target mentioned in the Maastricht treaty had to be interpreted as 3.0 per cent and not higher.
Dr Kohl was addressing business leaders in Munich where he met the Bavarian prime minister, Mr Edmund Stoiber, for the first time since the outbreak of a bitter dispute between the two men over the single European currency.
Mr Stoiber has angered Dr Kohl in recent weeks by calling for the launch of the euro to be postponed unless France and Germany meet the letter of the Maastricht criteria. Mr Stoiber welcomed Dr Kohl's remarks yesterday but warned the issue would remain the subject of debate for some time to come.
Delaying the project, as Mr Stoiber has been demanding now that economists doubt countries like Germany and France can meet the strict deficit target, would be wrong, Dr Kohl said.
Dr Kohl said Germany expected 2.5 per cent economic growth in 1997 and 3 per cent in 1998, enabling it to meet the deficit criteria in both years. Dramatic gaps in Bonn's budget have led to charges Bonn would not make the grade.
Dr Kohl did not refer directly to his dispute with Mr Stoiber but he took an oblique swipe at the Bavarian leader when he described public discussion of problems surrounding the euro as unhelpful. "We should concentrate on our own homework instead," he said.
Luxembourg's prime minister, Mr Jean-Claude Juncker, criticised the German euro debate yesterday, warning that speculation about weakening the Maastricht criteria "sent the wrong signals".
Dr Kohl's political troubles took a further turn for the worse yesterday when an influential economic information service predicted Germany's economic woes would force the chancellor to resign in the autumn.
Czerwensky Intern, an information service for businesses with a reputation for accuracy, says Germany's public finances are in such a chaotic state that the Finance Minister, Mr Theo Waigel, sees no way out of the crisis.
"Bonn observers expect in late autumn the resignation of the chancellor, the formation of a grand coalition under Mr (Wolfgang) Schaeuble or, in the worst circumstances, early Bundestag elections," the information service says.
Dr Kohl's Christian Democrats were swift to dismiss the prediction and Mr Horst Eylmann, chairman of the Bundestag committee on justice, claimed the government remained optimistic. "The coalition partners know they could not win a majority if fresh elections were held now so they are staking everything on turning the corner some time."
Mr Eylmann said Dr Kohl would prefer to go down to defeat in 1998 defending the euro than to abandon his colleagues now. But he warned that Mr Stoiber's Eurosceptic campaign was endangering the entire government re- election strategy.
"It could all look different if Mr Stoiber goes totally crazy with his anti-euro campaign. But I think his party views his escapades with mixed feelings and is not prepared to leave this coalition," he said.
