Quinn "hopeful" for agreement on stability pact for Dublin summit

THE Minister for Finance, Mr Quinn, said last night he was hopeful the Dublin summit would complete work on the post EMU stability pact. He was reporting to the European Parliament on preparations for the single currency.

The details of sanctions to be imposed on single currency countries which exceed the 3 per cent government deficit are still in dispute, as is the definition of when such a deficit might be considered "exceptional and temporary", hence not subject to sanctions.

Officials said that work in the monetary committee on Tuesday night had narrowed differences and the final meeting of the finance ministers under the Irish presidency on Monday would help the process.

But they expected the issue would not be resolved in time for Dublin summit, casting a shadow over the achievement of a very substantial EMU package - an ERM2, a legislative package to establish the euro, and agreement on the vast bulk of the stability pact.

Mr Quinn said there was a problem in finding a formula that expressed "quantification without numbers". The German government is keen to define "exceptional and temporary" as negative growth of 2 per cent. It fears any less precise definition would allow sanctions to become a political football.

Responding to British journalists' questions on the need for sanctions in the stability pact, the Minister argued that the union was simply replacing the "arbitrary sanctions of the market with rational sanctions based on clear, agreed procedures".