Spain and Germany hope to forge closer friendship

Date: 09/01/1997

By Pedro Lopez de Pablo

WHEN 14 Spanish ministers meet 14 German ministers in Bonn later this month, it will be the first time the two governments have convened in such a gathering.

The meeting, scheduled for 30 January, has no precedent, even during the years of Socialist rule in Spain, when Prime Minister Felipe González had a close personal relationship with German Chancellor Helmut Kohl.

Premier José María Aznar has met Kohl in one-to-one meetings three times since taking office last March. But Madrid hopes that this new approach will forge a friendship between the two governments and mark the beginning of closer ties.

Since its entry into the EU, Spain has held bilateral summits with its neighbours France, Italy and Portugal where on each occasion the two governments have met in their entirety.

But this month's meeting in Bonn will be the first such jump to solidify Spain's relations with Germany, the country which Madrid considers to be the real motor of European union.

Aznar will use the occasion to try to demonstrate that Spain will be in the first group of countries to join monetary union in 1999.

At his last meeting with French President Jacques Chirac, Aznar won support from Paris for his country's bid to be in the first wave. The Bonn gathering will provide a unique oppor-tunity for Madrid to secure German support.

This is regarded by the premier as especially important given that the strongest doubts about Spain's readiness to adopt the euro have come in recent months from Germany and in particular from the Bundesbank, whose directors consider Spain to be in the same group of ineligibles as Italy: countries rushing to fulfil the Maastricht criteria but which will not accomplish the real structural reforms needed for prolonged stability.

For this reason, the most important face-off during the meeting of German and Spanish ministers will be the one between Spanish Finance Minister Rodrigo Rato and his German counterpart Theo Waigel.

Rato does not miss a chance to make a public appearance in which he can claim that Spain has entered the land of economic stability. All his efforts have been geared towards driving the Spanish economy into the Maastricht criteria, and shouting it to the four winds.

Spain reduced its public deficit to 4.4&percent; of GDP in 1996, inflation fell by even more than predicted by the government and public debt is still falling. Furthermore, the difference between German and Spanish interest rates is narrower than it has ever been, which makes Spain a safer place for investors.

The Bonn gathering will provide an ideal opportunity for Rato to reiterate this data to Waigel and, he hopes, to put an end to German speculation about whether Spain can participate in monetary union.