GERMANY and Austria yesterday reiterated their determination to stick to the Maastricht criteria for European economic and monetary union (EMU).
Speculation that Germany was likely to seek a delay of the project because it may not meet all the entry criteria deeply unsettled world financial markets on Friday. The rumours were denied both by the Bundesbank and the German finance ministry.
In common with other peripheral EU states, the Dublin bond market suffered with the five year bond interest rate rising from 5.63 per cent to 5.8 per cent, while 10 year yields increased from 6.28 per cent to 6.4 per cent. Investors are likely to take some comfort from yesterday's statement by the two ministers.
In a joint statement released after an informal weekend meeting of the German and Austrian foreign ministers in the western Austrian ski resort of Lecham Arlberg, they said. "We reaffirm our conviction to call for full compliance with all criteria for joining economic and monetary union."
Countries who wish to join EMU scheduled to begin in 1,999 face strict entry criteria in terms of public deficits, debt levels, inflation and exchange rate stability, which were set out in the 1992 Maastricht Treaty.
The German Foreign Minister, Mr Klaus Kinkel, and his Austrian counterpart, Mr Wolfgang Schuessel, said the single currency, the euro, was Europe's "biggest challenge" over the coming years.
Mr Kinkel also attacked what he called "irresponsible" market speculation that Germany was seeking a delay of EMU, saying the launch of the euro was a "question of fate" for Europe.
