A COMPROMISE allowing the single currency to proceed was reached yesterday afternoon in Amsterdam.
The compromise allowed both the French and the Germans to emerge with what looked like good deals. Nevertheless, all sides agree that employment is now "firmly" at the top of the political agenda.
The deal gives the French specific commitments on job creation programmes while sticking to the German and British line of no new money. However, sources here indicate that it is the new socialist alliance which has allowed the compromise with Britain playing an active role.
The Stability and Growth Pact negotiated in Dublin last December stands, although it now carries two resolutions. First is a resolution on the pact, a simple political agreement, which gives legal elaboration to the Dublin agreement. At the same time the Exchange Rate Mechanism mark two and provisions for the legal status of the euro, also agreed in Dublin, have now been put to bed.
Also on the table is a special jobs summit in Luxembourg this autumn, a new Employment Chapter in the treaty and a redirecting of EU finances to promote infrastructure, technology and small firms.
Under the new employment resolution the mandate of the European Investment Bank (EIB) will be widened to allow investment in infrastructural and technology projects for the first time. There is also a commitment to help small and medium-sized enterprises in co-operation with the European Investment Fund.
The resolution also calls for the EIB to look at the areas of education, health, urban environment and environmental protection.
The change in the EIB's man-date could allow the Trans European Networks (TENS), or large infrastructural programmes proposed in 1994, to be reactivated. There is presently a lbillion ECU
(£750 million) hole in the funding.
The resolution calls for taxation and social protection systems to be made more employment- friendly.
There are also plans to use monies from the European Coal and Steel Community. It is being wound up in 2002, but at the moment the loans are being repaid more quickly than they are being given out. When the ECSC Treaty expires in 2002 its outstanding reserves will be used for a research fund for sectors relating to the coal and steel industry.
"It strikes a fair balance between efficient co-operation and the realisation that principle responsibility for employment rests with national governments," the British Prime Minister, Mr Tony Blair, said.
The German Finance Minister, Mr Theo Waigel, welcomed the deal and said monetary union is on the "right track". However, he also played down the spending commitments, repeatedly pointing out that no new money had been made available and there was no change to the Stability Pact.
A French spokesman said it was a "good compromise, a good deal, which goes in the direction of the French position". He added, "This is only the beginning. We have begun to reverse the trend. We have loosened the noose."