Political competition and uncertainty in Germany are complicating the long run-in to economic and monetary union - qualification for which will be based on this year's statistics of economic performance. Will Germany, the fons et origo of the project, qualify to join in the first wave? How closely will the decision be based on strict adherence to the Maastricht convergence criteria or is variable sustainability of economic performance in the medium to long term to be the qualifying yardstick? And would not Germany be much worse off if the whole EMU project fails?
These arguments have been opened up sharply in recent weeks within the ruling coalition by Mr Edmund Stoiber, the powerful premier of Bavaria, whose Christian Social Union has an overall majority in that State. His party's representative in the Bonn coalition, Mr Theo Waigel, the finance minister, has been strenuously arguing the case for strict observance of the convergence criteria, notably of the 3.0 per cent ceiling on budgetary deficits. Observers note the vigorous competition between him and Mr Stoiber and detect in the latter's insistence on a strict observance a stick with which to beat his rival, who is struggling with the consequences of a sharp economic downturn for this year's budgetary figures. Mr Stoiber says EMU should be postponed rather than fudged statistically.
The Chancellor, Dr Kohl, insists that postponement would be a disaster politically and could endanger the entire project. But rather than argue the case on pure grounds of sustainability, he has now, in deference to Mr Stoiber's strength, agreed that the convergence figures strictly defined must, and will be, met this year. It is one thing to say this, of course, and another to deliver it. The government has struggled in vain to find consensus within its own ranks, between both sides of industry or across the party political spectrum on a formula which would ensure that Germany comes within the convergence criteria. The other coalition partner, the Liberal Democrats, will not hear of tax increases; plans to cut back substantially on welfare benefits have been blocked by failure of the social partners to agree; opposition parties in the upper house the Bundesrat have used their majority there to prevent other initiatives.
Given the genuine difficulties facing the German economy this year, it is an unenviable task that faces Dr Kohl as he endeavours to ensure passage of the project he has made the centrepiece of his career. It is small wonder he has been exasperated by Mr Stoiber's opportunist interventions, which he suspects are driven by a deeper vein of Euro scepticism. But there is no doubting their strength, as was shown when Bavaria and other launder were able, through Dr Kohl, to veto an extension of majority voting in the Amsterdam Treaty.
Dr Kohl will, undoubtedly, maximise political pressure over the autumn to ensure that Germany qualifies by the letter of the treaty. By adopting the strict interpretation, he will put Germany increasingly at odds with the new French government. He is likely to find himself resorting to the more convincing arguments of sustainability, the more difficult he finds the task to be. He is also likely to argue strenuously that Germany - and Europe - would be much worse off if EMU fails. But the strict interpretation he has now embraced will make it more difficult to achieve.