STRICT adherence to the Maastricht criteria for European Monetary Union could drive some European economies into severe recession and exacerbate unemployment and social problems, according to Jefferson Smurfit Group chairman, Dr Michael Smurfit.

The drive to achieve a single European currency could destroy "the Europe of the past" if it is not handled properly, he warned. Relaxing some of the membership criteria, such as the size of budget deficits, for some countries, may be necessary, he said.

Dr Smurfit said he wanted to see European Monetary Union. "I believe that there is a need to change some of the goalposts and fudge some issues to make it work...I would love to see it happen but I am worried that people are too hung up on the numbers," he said.

Dr Smurfit was speaking after the September lunch of the Dublin Chamber of Commerce where he was guest speaker. With EU members moving towards EMU from different levels of wealth, inflation and expectations, he asked what would happen to "a strong Europe" if some countries had to opt out of the single currency.

Insisting that the 1999 deadline for EMU "should be written in blood", Dr Smurfit warned that the focus in European economies on meeting the EMU membership criteria was slowing economic growth. This slower growth environment was bad for business and would lead to higher unemployment and social pressures.

Austerity programmes were endangering economic recovery in some European countries, he warned. This was a danger which needed to be addressed and debated within the EU, he said.

Dr Smurfit said he was concerned about the impact of budget cuts and reductions in Government spending on the environment for business throughout Europe. Economic growth was the lifeblood of business, he said.

Pointing out that the environment in which a business operated was a crucial factor in running a successful business, he instanced the "enormous impact" the French government's determination to meet the Maastricht criteria was having on the French economy. Unemployment would rise in France as the government tried to reduce its budget deficit to meet the 1999 deadline, he warned. Business investors are nervous because of the cuts in government spending, he said.

Dr Smurfit was adamant on the 1999 deadline: "My view is that if it does not happen in 1999 it will not happen in my lifetime... We will never again get two leaders so determined to do it."