Push for urgent Euro-X launch

Date: 19/02/1998

FRANCE is pressing for Austria's finance minister to begin chairing meetings of the euro-zone's economic decision-makers months before the UK presidency of the EU comes to an end in June.

In a blow to British pride, Rudolf Edlinger would begin hosting gatherings of Euro-X - the council of single currency area ministers - as soon as monetary union was launched with a summit on 2-3 May.

"It may even be before that," said French Finance Minister Dominique Strauss-Kahn as he left a meeting with his EU counterparts this week.

Strauss-Kahn said that under the plan, the finance minister of the government holding the Union presidency at the time would chair Euro-X meetings if the country was a member of the euro-zone. If not, the leadership would pass to the member state next in the presidency line.

After the UK's term at the EU helm, the problem would not arise again until the first half of 2001 when Sweden takes up the Union's presidency. Unless the French change their tune, they would not step into the Swedes' shoes and retain the Euro-X leadership from July 2000 to the end of June 2001 - Belgium would take the reins throughout 2001.

Assuming Denmark had not joined EMU by late 2002, Greece - if it is a member by then - would also hold the Euro-X presidency for a whole year until the summer of 2003.

Having won support for the formation of the Euro-X group at the Luxembourg summit in December, Strauss-Kahn is determined to breathe life into his government's creation as soon as he can.

However, the suggestion that the coordinating group should be established under the British presidency within the next three months will come as a blow to the UK government. Finance Minister Gordon Brown and Prime Minister Tony Blair are seeking to maintain their economic policy influence within the EU as a whole for as long as they possibly can.

The French idea of a council of the euro-zone's finance ministers to act as a counterweight to the all-powerful European Central Bank ran into considerable German-led opposition when it was first raised nearly two years ago.

Bonn feared that Euro-X would threaten the ECB's independence, but eventually agreed to it on the condition that it remained an informal gathering of ministers, sharing information on their taxation and employment policies which would help cement their monetary union.

The Luxembourg summit agreed that policy discussions could only be referred to Euro-X by a unanimous decision of the Ecofin Council.

Those countries remaining outside the euro-zone from its inception in January next year - the UK, Denmark, Sweden and Greece - have accepted that policy on the foreign exchange rate of the euro would have to be the province of Euro-X.

"The rest will honestly be decided on a case-by-case basis," said an official from one of the 'out' countries. "Labour market policy coordination, for example, should really be dealt with by social affairs ministers, and taxation should stay with the high-level group set up to deal with it."

France is pressing for a rapid start to the work of Euro-X as soon as monetary union is launched on 2-3 May 1998.