Eleven countries are likely to participate in the launch of the single currency on January 1st, 1999, according to the latest EU Commission economic forecasts. An upturn in European economic growth - projected at 2.6 per cent this year - and the success of the Italian government in rescuing its budget means that 14 of the EU member states appear likely to qualify under the Maastricht criteria for participation in the launch of the euro, according to the autumn forecasts, published yesterday.
Of those willing to participate, only Greece will not yet meet the criteria, though it may do so by 2000, while Britain, Denmark and Sweden will opt out initially.
EU growth is expected to rise to 3 per cent next year and 3.1 per cent in 1999. But the news on employment is not so good - by 1999, a net 3.8million jobs will be created, the Commission says, but the unemployment rate will only fall to 9.7 per cent. The decision on who will participate in the single currency will be taken on May Day next year by heads of government on the basis of the actual out-turn for 1997 and projections for 1998.
Yesterday a delighted Commissioner for Economic Affairs, Mr Yves Thibault de Silguy, stressed again that the decision will be based not only on reaching the Maastricht criteria on deficit, debt, and inflation, but on the sustainability of convergence of member states' economies. Mr de Silguy said conditions "had never been so favourable" for monetary union to take place on a "broad, stable and sustainable basis" and he urged Italy's leaders to act swiftly to ensure that, after the major sacrifices made this year, the country did not "fall at the final hurdle". If the Commission's forecasts are confirmed, few need fear exclusion. Only France, whose deficit this year is predicted to be 3.1 per cent of GDP, and Italy, the cost of whose concessions to the left-wing allies of the government make calculations of their 1998 deficit unclear, are on the margins of failure on the 3 per cent deficit criteria.
In addition, Germany, still suffering from the costs of unification, is unlikely to meet the government debt criterion - its debt is rising slightly to 62 per cent this year instead of declining towards 60 per cent.
However, the criteria have sufficient flexibility to allow for such minor aberrations and Brussels observers yesterday were expressing confidence that eleven would participate. The size of the first group will provide a substantial reassurance to Dublin.
