EU to reassert commitment to euro

EU Finance Ministers meeting here today are expected to try and reassure markets that their commitment to the euro timetable and to its strength is unwavering.

The meeting, attended by the Minister for Finance, Mr Quinn, will also approve Ireland's convergence programme as part of the ministers' routine monitoring of states, efforts to bring their economies into hue with each other ahead of the launch of the euro. The Commission is understood to report favourably on Ireland's performance and its plans for the future, urging on which ever government takes over not to be swayed from current spending targets. The meeting, which may well be Mr Quinn's last Ecofin, is likely to see warm expressions of regret at the potential departure of a minister who is very highly regarded as one of the key figures in the construction of the euro.

Arriving at the meeting, Mr Quinn expressed confidence that the euro would go ahead on time with no fudging of the criteria. He believed the commitment of the French Socialists to the project was solid, he said.

On whether the French would meet the 3 per cent deficit target, the Minister said that as long as the deficit was not over 3.1 or 3.2 per cent "it was not going to make a lot of difference".

The crucial factor, the Minister said, was the real and "extraordinary" sustainable convergence of Europe's economies not only on deficits but inflation and interest rites.

Although the formal agenda does not provide for a discussion of the euro timetable or the Maastricht criteria, the events in Germany and France over the last two weeks together with Sweden's announcement that it does not intend to be part of the first group, are likely to be seen as demanding a response.

This will probably take the fond of a reassuring statement to the effect that the ministers commitment to a strong euro is undiminished.

However, fears that the French will attempt to reopen negotiations on the Stability Pact agreed in Dublin are dismissed by diplomats.

A Dutch diplomat, speaking for the current EU presidency in Brussels, said it bad not received a formal request from France to reopen negotiations on the pact.

The prospect of renewed talks has been played down by EU officials. Many of them expect the Socialist preelection rhetoric to shift to a more centrist and European stance with the government now in office.

The meeting must, however, give formal approval today to the legal text arising out of the Dublin agreement in order to put it on the table for the Amsterdam summit.

Commission sources say the only changes likely are the addition of a reference, at the request of the European Parliament, to a Maastricht Treaty clause.

This requires the Commission in assessing any member state's excessive deficit to take into account and no more - whether the state's public investment programme is larger than its deficit.

The meeting started last night with a dinner where ministers considered the shapes of new coins for the single currency.