Single Currency Is Possible by 1999, EU Commissioner Says

The European Union could introduce a single currency before 1999 even though member countries are currently experiencing economic problems like bulging public deficits, said European Commission Vice-President Henning Christophersen.

“Our models show that with reasonable economic growth and some efforts by member states, a majority of member states will comply with the criteria concerning public finances in 1998,” Christophersen said.

The EU’s 12 member countries can decide to create a single currency between 1997 and 1999, according to the timetable set by the Maastricht Treaty on political and monetary union.

They must first meet a number of criteria, including low inflation and low budget deficits, which are currently satisfied only by the tiny grand-duchy of Luxembourg.

“It’s too soon to conclude from the present state of member states’ public finances” that the EU won’t establish a single currency before 1999, he said at a meeting on European monetary union. “We’ve seen too many examples of rapid improvement for that,” he said, citing Ireland and Denmark.

The Maastricht Treaty says a country’s budget deficit mustn’t exceed 3% of its gross domestic product. The economic slowdown affecting most of the EU has curtailed state revenue and increased deficits.

Speaking at the same conference, French Economy Minister Edmond Alphandery said the treaty was “very flexible” about a core group of countries moving separately toward a single currency.

“That’s not an institutional problem,” said Alphandery. “The Treaty in that respect is very flexible.”