LUXEMBOURG: EU MINISTERS GATHER FOR COMMON CURRENCY MEETING

(8 Jun 1997) Natural Sound

European Union finance ministers gathered for a hastily arranged meeting on Sunday to confront the latest bout of uncertainty clouding their plans to launch a common currency on January 1st 1999.

But the E-U Commission President Jacques Santer said there would be no delay in the launch.

Election promises by France's new government and Germany's inability to cover its budget shortfall have fuelled speculation that the European Union must postpone the launch of its single currency.

As E-U finance ministers met on Sunday they were under pressure to dispel such doubts about the proposed euro.

E-U Commission President Jacques Santer remained adamant that European Monetary Union, or EMU, will be launched on schedule.

UPSOUND:
Q: Are you going to delay EMU?
"No delay."

Many will be looking to their new French colleague Dominique Strauss-Kahn to use his European debut to confirm Paris' commitment to the single currency.

France's new Socialist-led government says it still wants the euro to go into effect on schedule.

But it won the election last week on pledges not to impose unpopular tax hikes and spending cuts considered essential for France to cut its budget deficit to levels required for entry into the E-U currency union.

Germany's own efforts to slash its budget deficit have recently run into problems.

The Central Bank opposed plans to revalue gold and currency reserves and news of 11-point-4 per cent unemployment - a post-war high - put pressure on the government to increase welfare spending.

France and Germany have been the driving forces behind the plan to unite the economies of the 15 E-U nations behind the single currency.

E-U members have until the end of the year to narrow budget deficits to below 3 per cent of gross domestic product, reduce debt to 60 per cent of G-D-P, and keep inflation and interest rates down.

Most countries however are struggling to implement spending cuts or tax increases.

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