Denis Staunton in Berlin and Ian Traynor in Bonn
A SENIOR adviser to Chancellor Helmut Kohl has called on him to admit that Germany would not pass the test this year for a single European currency and urged a delay in the launch of European Monetary Union (EMU).
But as Herbert Hax – head of the “five wise men” panel of economists who act as advisers to the government – added his voice to the growing chorus of EMU- scepticism in Germany, Kohl tried to silence the doubters, declaring that Germany would meet the single-currency criteria and that the euro would be launched on schedule in 1999.
Hax agreed with the expert view, which is consistently denied by the government, that Germany would miss the two key EMU targets this year – keeping the budget deficit at or below 3% of gross domestic product and limiting state debt to 60% of gross domestic product.
“Either you weaken the criteria or Germany will be ready for the euro later,” he told the Bild am Sonntag newspaper. “The politicians in charge have unfortunately made talk of postponement a taboo. But the truth is simple: stability is more important than the timetable.”
The dissident statement from a source close to the government dealt a blow to Kohl’s credibility in refusing to countenance an EMU setback.
But the chancellor reiterated his determination to see the euro launched on time. “We will stick to both the agreed launch date and the convergence criteria,” he said in Berlin last weekend. He added that the single currency would be “strong and stable”.
Germany’s jobless figure of 4,7-million is putting a huge strain on public finances. Most economists predict that this year’s budget deficit will exceed the 3% ceiling.
Kohl’s woes were compounded by striking miners who occupied pits and blocked motorways in protest at the government’s plans to slash mining subsidies as part of its drive to get the public finances fit for the single currency.
More than 5 000 miners demonstrated in the Saarland, near the French border, last weekend and blocked the motorway to Luxembourg. Miners rallied in Dsseldorf to denounce the government’s plans to cut subsidies to around one-third of their current level over the next eight years, a scheme they say would cost more than half of the mining sector’s 90 000 jobs.