A Paper Pie in the Sky: Europeans Question Goal of Single Currency
Business leaders say market is already closely integrated
STRASBOURG, FRANCE — AS French President Jacques Chirac and German President Helmut Kohl meet today in Strasbourg for their second summit, they face growing doubts at home on a key common goal: the move toward a single European currency.
Even in this most European of French cities - seat of the European Parliament, the Council of Europe, and flagship Franco-German ventures, such as the television station Arte - many business leaders and politicians say monetary union may not be worth the price.
''I don't see industries clamoring for a single currency,'' says Bernard Higel, president of the Alsace Development Agency, as he takes a credit card out of his wallet. ''We already have a single currency.''
Giving a core of the European Union's 15 members a single currency was an article of faith for true believers in a united Europe only months ago. But this requires members to get deficits and currency fluctuations in line with the strong Germany economy, which is proving impossible for some countries and undesirable for others. Now the target deadline for that goal is slipping along with public support.
Last month at a summit in Cannes, France, European heads of state pushed back the target date for monetary union from 1997 to 1999. Spokesmen for the European Commission, which has urged strict deadlines in converging EU currencies into one, downplayed the delay.
Clinging to words on paper
''There is a treaty. It will be applied,'' said a Commission spokesman yesterday, referring to the Maastricht Treaty of 1992 on deepening European integration. ''The nations that meet convergence criteria will move toward a unified currency by 1999. It's indispensable for the management of a single market.''
The move toward European unity in the late 1980s was driven by a strong business coalition, led by firms like Dutch electronics company Phillips. No such high-profile business coalition has emerged in support of a single currency.
French business leaders welcomed the delay in implementing a single currency. Any earlier move would have been ''unrealistic,'' said Jean Gandois, president of the CNPF, France's leading business organization, based in Paris.
Across the border, the German Industrial Association [BDI] in Cologne also raised concerns about moving toward a single currency. In a May report, the BDI questioned whether monetary union is a prerequisite to a single European market.
''Of course the European internal market can also exist without a single currency, but the integrated European economic area will be unable to exploit its full potential as long as different currencies exist side by side and tie down valuable resources,'' the report argued. It also noted: ''All opinion polls seem to indicate that the majority of Germans reject giving up the Deutsche mark.''
Sympathy for the far right
Voters in the Alsace region around Strasbourg gave strong support to the Maastricht Treaty in a 1992 referendum, which barely passed nationwide. But in the first round of this year's presidential elections, 1 out of 4 voters in Alsace supported National Front candidate Jean-Marie Le Pen, who has called for abandoning the treaty. This was the highest vote in France for the extreme-right candidate.
''Of course we can go back on Maastricht,'' a Strasbourg National Front leader, Georges Pierre Noth, told party activists in the neighboring town of Oberdai this weekend. ''Treaties are made to be broken. That's what wars are about.''
A toned-down version of this view appeared in the mainstream press this weekend. ''History is full of useless treaties, scoffed at, forgotten once the day comes to respect them. Often, so much the better,'' said Alain Griotteray, foreign-affairs analyst for the Figaro, a respected conservative newspaper.
''The taboo has been broken,'' says Jacob Arfwedson of Institut Euro 92, a Paris-based conservative think tank founded by French Finance Minister Alain Madelin. ''It's okay for serious journalists and politicians to say that we might want to reconsider a single European currency.''
France's new conservative government has argued that France must make the sacrifices to join a single currency, including reducing budget deficits. Prime Minister Alain Juppe told the National Assembly May 23 his government would respect ''all the conditions imposed by entrance into European and monetary union.''
But Philippe Seguin, president of the National Assembly and a key rival to Mr. Juppe in the conservative Rally for the Republic party, reaffirmed his doubts about a single currency in an interview in Figaro Magazine this weekend.
France is already in the single currency with the Germans, having decided to link its currency to the mark, he argues. ''Having made this choice, we are now bearing the full brunt of competitive devaluations of other European nations who have not made the same choice we have,'' he argues. ''The governor of the Bank of France says that a single currency is the prelude to a solution of the problem of unemployment. I'd like to see him explain just how.''