EUROPEAN Community leaders last night dramatically hardened draft clauses in the proposed monetary union treaty, calling for an ╥irreversible process╙ under which a single currency would be formed automatically by January 1999 at the latest, even if only a minority of member states took part.
They signalled that although Britain would get its opt-out clause, it would be designed for Britain alone.
The proposed new drafts are backed by all member states, and the British said they would raise no objection. The drafts say that if the EC Council of Ministers is unable to agree that at least seven states can enter monetary union at the end of 1996, then by the end of 1997 the process will begin automatically, launching a single currency on January 1, 1999.
Last night, John Major was continuing to press for a general opt-out clause. He argued that the new texts went backwards by excluding the earlier provisions over opting out. But other heads of state were giving no ground.
The Prime Minister stressed that the EC was taking a great economic risk by allowing for a minority of states to form a monetary union by 1999. In effect, this was creating the two-speed Europe which EC leaders had continually said they opposed, and countries that did not meet the convergence criteria would be in a very weak position inside the exchange rate mechanism.
However, he accepted that trigger dates would have a powerful effect in focusing minds on the need to meet convergence terms.
Henning Christophersen, the Commissioner for Economic Affairs, insisted that the council had found an elegant solution. By agreeing to fixed dates, those countries that had difficulties meeting the convergence terms were imposing agreement on themselves. He believed that Britain would participate in 1997.
Wim Kok, the Dutch finance minister, representing the Dutch presidency of the EC, said that it was right for the treaty to allow for a minority of eligible states at the second date, otherwise the EC risked being locked into a position in which six states might be ready to go ahead, but not seven. Fears that the clause could be abused to allow two or three states to go ahead were exaggerated. He expected five or six to elect union at the second opportunity.
The likely adoption of a ╥two bite╙ approach to monetary union, to be agreed by qualified majority voting, is being regarded as an important victory for the Germans and French. Chancellor Helmut Kohl has said that he wants procedures which allow a fast track to stage three, when a single currency is to begin.
Although Britain has negotiated hard for monetary union to be organised around the pace of economic convergence, with no trigger dates, the British delegation was putting on a relaxed face Government sources acknowleged that Britain was ╥not at the centre╙ of the negotiations for launching a single currency. The focus of British efforts remained a special opt-out clause, and Mr Kok said he was sure that they would get what they wanted. However, a large majority of EC states opposed a general opt-out.
