De Silguy warns EMU delay could lead to claims

European Commissioner Yves-Thibault De Silguy has raised the prospect of a flood of compensation claims from banks and big business in the event of a delay to Europe's planned single currency. Mr De Silguy's warning came as German Finance Minister Theo Waigel insisted Bonn was not discussing a delay, despite calls from within Chancellor Helmut Kohl's coalition to consider a postponement if France fails to qualify for the project.

"If the heads of government decide that we won't start until 2001 or 2002, then a flood of compensation claims will break out above us," Mr De Silguy said in an interview published in today's edition of the German news magazine Der Spiegel.

"All the banks and companies who have trusted the treaty could demand the costs of their preparations back," said Mr De Silguy, the EU's commissioner for monetary affairs. De Silguy side-stepped direct questions about whether France could participate, but hinted he favoured a strict interpretation of the budget deficit criterion in the Maastricht Treaty, which lays down the rules for economic and monetary union (EMU).

Mr De Silguy said a decision to delay EMU would constitute a breach of international law, as the treaty lays down a start date of January 1st, 1999. He said this meant the EU would also face charges of breaking the terms of the treaty in Europe's highest courts if heads of government decided to postpone the project.

Pressed on whether France could take part in EMU with a deficit of 3.5 per cent of gross domestic product, he replied: "Confidence in the euro must be secured from the beginning. We can't take any risks when it comes to sticking to the criteria."

The treaty sets a target of 3 per cent of GDP.