Kinkel reaffirms commitment to EMU timetable

THE German Foreign Minister Mr Klaus Kinkel, yesterday reaffirmed that Europe's single currency must start on time in 1999 and that the stability criteria laid down in the Maastricht Treaty should be strictly adhered to.

"The euro must and will come at the designated time on January 1st, 1999, and under the strict adherence to the contractually agreed stability criteria," Mr Kinkel said in a statement released ahead of Europe Day today.

"Two things will guarantee the lasting stability of the euro: the independent European central bank - even more independent than the Bundesbank - and the stability pact, which will also guarantee the strict adherence to the. . . stability criteria after the introduction of the euro."

Mr Kinkel has often said the euro must be introduced on time last month saying the project had passed the point of no return, a comment which irritated the German Finance Minister, Mr Theo Waigel, who says fulfilment of the Maastrict criteria is more important than the scheduled 1999 start.

Most experts expect Germany to miss one of the Maastricht targets the goal of recording less than 3 per cent public deficit to GDP - and record a deficit of around 3.2 per cent to GDP because of the heavy burden of mass unemployment.

But Mr Waigel has said Germany is determined to ensure that its 1997 public deficit falls below 3 per cent of GDP.

However, Germany's opposition Social Democrats (SPD) said they were against any cuts in the country's state pensions, which the government wants to overhaul along with the tax system.

Mr Rudolf Dressler, the head of the SPD pension commission, said it was very unlikely that the party would be able to agree with Chancellor Helmut Kohl's ruling coalition on a joint approach to pension reform.

But Mr Dressler said in order to show the willingness of the SDP to negotiate on the issue the party would still take part in discussions with the ruling coalition tomorrow.

He said if these talks failed Germany's citizens would have to decide at next year's general elections whether they wanted a structural reform of the pensions system or lasting cuts.