Germany's Chancellor, Dr Helmut Kohl and the French prime minister, Mr Lionel Jospin, presented a united front on the euro yesterday, insisting that the currency would be launched on schedule and according to the strict conditions laid down at Maastricht. Mr Jospin was in Bonn for a two-hour meeting with Dr Kohl, the French prime minister's first visit to Germany since taking office.
A German government spokesman said that the two leaders agreed that both the timetable and the criteria for the euro would be strictly observed.
"Dr Kohl and Prime Minister Jospin stressed their belief that the introduction of a stable euro, according to the timetable in the Maastricht Treaty and under strict adherence of the stability criteria, is indispensable for the future of Europe. Germany and France stand unconditionally by the agreements already made and will do everything to fulfil the conditions for the introduction of the euro," he said.
But, with budget deficits in both Germany and France expected to remain above the required 3 per cent of Gross Domestic Product (GDP), it appears Bonn and Paris are preparing to interpret the criteria liberally in order to ensure the new currency begins on time.
Signs that the German economy is recovering, with an export boom fuelled by the weakness of the deutschmark against the dollar, have encouraged backers of the euro.
They argue that, even if Bonn misses the 3 per cent target by a point or two this year, the trend of the deficit is downwards.
More than 50 top German economists backed the euro last week, predicting that it would be a strong, stable currency that would benefit the entire European economy.
Bonn denied a report earlier this week that, during a recent meeting with the British prime minister, Mr Tony Blair, Dr Kohl proposed postponing the launch of the euro until 2000 if Britain agreed to join. Before he left Paris, Mr Jospin predicted his government would succeed in hitting the 3 per cent target, a claim that was echoed by the French central bank. The task is a Herculean one, particularly in view of the public spending promises that brought the Socialists to power.
Dr Kohl received his guest at the chancellery with full military honours and the atmosphere during the talks was described by officials as "especially friendly". But Bonn and Paris remain divided over a number of key elements of Economic and Monetary Union (EMU), notably control over the new European central bank.
Germany insists that the bank should be independent, like its own Bundesbank, but France is demanding a measure of political control over the bank's decisions.
Dr Kohl and Mr Jospin will meet again next month in the eastern German city of Weimar for the regular, biannual Franco-German summit.
