German politicians sure Bonn Paris dispute over monetary union will be resolved easily

GERMAN politicians expressed confidence yesterday that the dispute between Bonn and Paris over Economic and Monetary Union (EMU) would be resolved and would not overshadow the Amsterdam summit.

But the Finance Minister, Mr Theo Waigel, warned that he remained firm in his opposition to tinkering with the EMU stability pact agreed in Dublin last December and to funding costly job creation programmes.

"I will not go along with programmes under which Germany pays one third to Europe and gets only 15 per cent back," he said.

Last Friday's FrancoGerman summit in the French city of Poitiers was overshadowed by the EMU row, which was sparked by the surprise request by the new French socialist government for more time to study the terms of the stability pact. The German Chancellor, Dr Helmut Kohl, was understood to be angered by a last minute demand by the French prime minister, Mr Lionel Jospin, for an expensive European Union job creation programme.

Dr Kohl said publicly that he had not had time to read Mr Jospin's proposal, which is seen as the price Paris is demanding for signing the stability pact. Officials said the chancellor was "disorientated" by the demand.

Bonn regards the stability pact as crucial to the credibility of the new currency, which remains unpopular with the German public.

The conservative prime minister of Bavaria, Mr Edmund Stoiber, called yesterday for the euro to be postponed unless it was certain to be as stable a currency as the mark.

"The mark, with hard earned savings attached to it, represents the lifetime efforts of the people who rebuilt our nation. The mark is inseparably linked to our economic miracle," he said. "The EMU will begin on January 1st 1999 as a stable union, or it must be postponed until such time as the preconditions are in place".

The Foreign Minister, Mr Klaus Kinkel, was confident yesterday that France and Germany would work together to make the summit a success. He predicted that the EU would agree to strengthen national job creation programmes but ruled out Europe wide employment initiatives.

"Amsterdam must not fail. Too much is at stake for Europe. The French government know that and we know it. Euroscepticism must not be given a chance. For us, there is no alternative to Europe," he said.

. FRANKFURT - Bundesbank President Hans Tietmeyer has not urged either a delay of monetary union or a plan to ensure an orderly delay, a Bundesbank spokesman said yesterday. He was dismissing a Der Spiegel report citing Mr Tietmeyer as having told bankers a plan was needed to cover a postponement.