The German government and the fiercely independent Bundesbank agreed yesterday to revalue the central bank's currency reserves this year to give a boost to Bonn's attempt to join European monetary union.

Finance Minister Mr Theo Waigel and Bundesbank President Dr Hans Tietmeyer hammered out the final details of the plan, which could provide the government with well over 10 billion deutschmarks in additional revenue that it will use to pay off old debt.

The plan was first hinted at last month when Mr Waigel stunned financial markets with a scheme to change Bundesbank law and force it to revalue its huge gold and currency reserves to improve Bonn's chances of qualifying for monetary union.