Details bedevil agreement of ‘stability pact’

Date: 12/09/1996

GERMAN Finance Minister Theo Waigel is close to winning acceptance of his plan to enforce budgetary discipline in a monetary union, but the devil remains in the detail.

In the countdown to the informal meeting of finance ministers in Dublin on 21 September, member states' monetary officials have been trying to narrow the minor differences still hanging over Waigel's 'stability pact'.

The bulk of the pact is agreed. Governments in a monetary union will have to keep their budget deficits below 3&percent; at all times and close to balance during boom years. Failure to do this will be met with fines.

No finance ministry will challenge these principles, but a meeting of the EU's secretive monetary committee this week laid bare the lingering disputes between Germany, the European Commission and other member states over the details.

Germany is pressing for a fixed deadline of six months between discovery of an excessive deficit and imposition of cash sanctions, while the Commission is holding out for nine.

The continuing differences have led Economics Commissioner Yves-Thibault de Silguy to shelve his plan to produce his own detailed proposal until after Dublin. Instead, he will produce a working paper and look for a political steer from ministers.