German Finance Minister Mr Theo Waigel said yesterday Spain was on track to join Europe's single currency, but raised fresh doubts about the credibility of Italy's fiscal austerity measures.

He warmly praised Spanish Prime Minister Jose Maria Aznar in a speech in Munich for creating a "mini economic miracle". With public debt falling sharply, Spain was a prime candidate to join economic and monetary union (EMU), he said.

The applause for Spain stood in sharp contrast to doubts about Italy that he raised in an interview with Der Spiegel newsweekly to be published ahead of a visit to Bonn on Thursday by Italy's treasury minister Mr Carlo Azeglio Ciampi.

Mr Waigel said Italy still had to credibly answer questions to allay fears its deficits had been cut through budgetary tricks. He said Rome had made impressive progress.