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Western Press Review: Euro Currency Launches Into Sea Of Compromise


By Don Hill and Esther Pan



Prague, 4 May 1998 (RFE/RL) -- "All Europe will pay for this folly," columnist William Rees-Mogg thunders today in The Times, London, in a commentary on a weekend deal reached by European leaders over the presidency of the new European Central Bank.

TIMES: It is Chirac who has made the stupidest blunder

Rees-Mogg writes: "The cowardly compromise is a scandal, because it shows that nothing, but nothing, really counts in the European Union except the crude assertion of national will."

The writer says: "It also shows the weakness, weakness, weakness of successive British governments. How badly we continue to play the European game, repeatedly appeasing forces that are hostile to our view of the world. The prime minister was actually in the chair when the grotesque surrender of giving Wim Duisenberg, the Dutch candidate, only half a term and France the other half, was accepted."

The writer denounces French President Jacques Chirac. Rees-Mogg writes: "It is Chirac who has made the stupidest blunder. (Chirac) is not le buldozer, as the French used to call him, but a bullfrog puffing himself up as the master of the farmyard."

LIBERATION: Chirac was unable to differentiate between national interest and nationalist vanity

French newspapers are divided today on Chirac's performance at the Brussels summit. Liberation, Paris, says EU skeptics will be strengthened by his insistence that France must have a hold on the bank presidency. "Was it necessary to deal such a blow to the Franco-German alliance by effectively giving dangerous ammunition to German Euroskeptics and to Gerhard Schroder, (Chancellor) Helmut Kohl's main adversary?" the newspaper says. It says: "Was it really necessary to give a base display of document fiddling, horse-trading, punches below the belt and stabs in the back to open the era of the euro when, in fact, there was no difference between the two candidates? Even if Helmut Kohl also did not show himself in his best light in the battle of the ECB, it seems as if, in this case, Chirac was unable to differentiate between national interest and nationalist vanity."

LE FIGARO: The union remains fragile



Le Figaro, Paris, praising Chirac's tactics, says French-German differences show that European Union remains fragile. Le Figaro says: "Chirac was rarely in the past as convinced or as convincing a European as he was in Brussels. (He) no longer doubts that France's future and that of Europe is the same. (But) the Franco-German spat in Brussels shows the union remains fragile, with or without the euro. Europe is like a bicycle. If you stop pedaling, the bike falls over."

LA REPUBBLICA: The heads of state did the almost unbelievable job of ruining the historic summit

Italy's La Repubblica and Il Messagero, both published in Rome, criticize the summit in editorials today. Says La Repubblica: "It should have been a triumphal march, a worldwide glorification on the theme, 'A Superpower is Born.' Instead, the heads of state assembled in Brussels to launch the Euro did the almost unbelievable job of ruining the historic summit. They turned the summit over the value of stars into a marathon of haggling over the price of milk."

IL MESSAGERO: The fight from Brussels was the lowest point in the German-French relationship for decades

Il Messagero says: "The fight from Brussels was the lowest point in the German-French relationship for decades. The new day that the Euro brings will certainly endure many political uncertainties. The likelihood is that the political leadership of the continent will prove itself more prepared than we may think."

LA STAMPA: The summit became another settlement in the eternal French-German conflict

La Stampa, Turin, says: "European integration is born out of the reconciliation of France and Germany. But there still remains poison between them, as the atmosphere at the European summit meeting showed. The summit should have been a great party. Instead it became another settlement in the eternal French-German conflict."

INTERNATIONAL HERALD TRIBUNE: The leaders brought doubt and the potential for discredit

Writing from Brussels today in the International Herald Tribune, John Vinocur says in a news analysis: "As much as the leaders of the EU wanted to launch their new monetary union into a high and confidence orbit, (they) failed to mark their enterprise with a sense of promise and momentum.

"Instead, they brought doubt and the potential for discredit to the presidency of the new European Central Bank, the post that was meant to symbolize the euro's coming strength and its independence from political pressure. The new Europe of the single currency, with its ambitions to serve as a global rival to the dollar, wound up looking remarkably like the old one, with a dark trade of deals, dissembling and nationalism staining its first day out in the world."

FINANCIAL TIMES: The appointment of the first president was undignified and disappointing

The Financial Times, London, editorializes today: "The manner in which the first president of the European Central Bank was appointed by the leaders of the European Union this weekend was undignified and disappointing."

WASHINGTON POST: A monetary union without a fiscal union is particularly dangerous

Politics aside, the euro also embodies a basic structural weakness that may be its future undoing, a commentary in The Washington Post says.

Robert M. Dunn Jr., a professor of economics at George Washington University and frequent commentator on international economic affairs, writes: "Amid all the euphoria over the formal nomination of the 11 countries entering the European Monetary Union, little attention is being paid to the fact that EMU faces problems that make its success far from certain. The critical flaw in EMU is the inability of any nation within its membership to use monetary policy to escape a business cycle not shared by a majority of the members. This problem is worsened by the lack of a fiscal union to accompany the (monetary) union, which means that a country in recession will get little or no financial help from other members."

Dunn says: "A monetary union without a fiscal union is particularly dangerous because it means that regions in recession will have to bear all the costs of the downturn and will not be able to use monetary policy to encourage recovery."

He says: "The EMU can be expected to succeed for a group of countries that tend to share the timing of business cycles, so that a one size fits all monetary policy is appropriate, or if labor is highly mobile among members, so that people will leave recession countries and find jobs elsewhere. Neither condition holds for the 11 prospective EMU members."

Dunn concludes: "Without a fiscal union, EMU could fail. A few instances in which a minority of EMU members have to survive monetary policies that are inappropriate for their needs could lead some governments to decide to print their own money again. Monetary unions are difficult to create, but easy to take apart."
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