Eddie George warns of jobs threat to EMU

HIGH unemployment levels in some continental countries pose a threat to the 1999 goal of European Monetary Union (EMU) and a single European currency, Bank of England governor Mr Eddie George said yesterday.

In his most negative comment to date on EMU prospects, Mr George warned about the risk of "serious political discord" within Europe if EMU "goes wrong" and emphasised the need for the political debate on EMU to pay more attention to economic issues.

As a central banker, Mr George declined comment on the political debate about the loss of national sovereignty.

"Recent developments cause me to be more, rather than less, doubtful about the wisdom of moving ahead until we see more clearly just how the unemployment problem is being addressed in the different potential members of the monetary union and what the consequences are likely to be", he said.

Mr George, addressing delegates attending a Royal Institute of International Affairs conference in London, expressed concern that the Maastricht Treaty timetable was producing "a sort of spring to the line by the end of next year". This was not necessarily helpful in terms of the immediate economic effects and raised question marks over whether the effort to achieve convergence could be maintained, Mr George said.