- Brussels, 29/09/2000 (Agence Europe) - At their meeting on Friday morning under the chairmanship of French Finance Minister Laurent Fabius, in the presence of ECB President Wim Duisenberg and …/..
Commissioner Pedro Solbes, the Eurogroup tackled the four following issues:
- Results of Danish referendum. "We respect the Danish people's decision but regret it" declared Mr Fabius, who specified that the finance ministers of the euro area had also noted that this decision would, legally, not prevent Denmark from joining at a later date. "This decision in no way changes the situation of the euro", added the president, "because the size of the Danish economy is only 2% of the whole. This in no way reduces the importance that we attach to Denmark's decision, but it does not modify the economic situation". Mr Fabius pointed out that the members of Eurogroup welcomed the "decision by the Danish government to keep the krone anchored firmly compared to the euro". Wim Duisenberg, for his part, said he obviously shared the regrets expressed by the finance ministers but "from now on, it's business as usual!". Regarding the link between the euro and the krone, he said that, technically, the exchange mechanism is a contract between the central bank of Denmark and the European Central Bank. The ECB fully has the intention to respect this contract, he affirmed (which means that the ECB will intervene in supporting the krone, if needs be). In response to questions, the following clarifications were made:
- Risk of "no" contagion spreading to Sweden and the United Kingdom? "The euro is 300 million people. It is also something that works. It is something that is supported and that rests on a strong economic activity. Those who are members of the euro area are pleased", said Mr Fabius. In this context, do we need new members? Noting that Greece had joined the area and that the Danish decision was "not really an innovation" (he recalled the "no" in 1992 to the Treaty of Maastricht), Mr Fabius simply noted that other countries should give their opinion "in due course", but that the "soundness of the euro area" was at any rate 'established". He said: "If they want to join us, so much the better. At any rate, the euro area will continue to be".
- Consequences for Denmark: "The Danish people have chosen to deprive themselves of the advantages of being part of the euro area", commented Mr Duisenberg, who cited "the increased rate of growth and prosperity, a phenomenon within the euro area". Although Denmark has chosen to "keep the system for anchoring its fixed but adjustable exchange rate, the uncertainties linked to the fact that it does not have an irrevocable fixed parity will continue to exist".
- Consequences for the IGC. The president of the Eurogroup tried to be reassuring. He first of all observed that the IGC would come to an end "before the other countries have given their position", and that everyone acknowledges the need to make the institutions more effective and more democratic. Mr Solbes added that Prime Minister Rasmussen had clearly stated that he wished to continue cooperating in the IGC.
- Enlargement and belonging to the euro area. Enlargement will not entail "automatic consequences" concerning single currency membership, recalled Laurent Fabius, who specified that: "it is obvious that, for belonging to single currency, one needs to be a member of the EU. But it is not because one belongs to the EU that one must join single currency", as a whole series of criteria and mechanisms are provided for leading to single currency. "The criteria must be observed", added Mr Solbes, saying "there will never be a weakening of the euro!"
- Need to strengthen the Eurogroup? Having the impression that this body "works well" and that it does "really useful" work, Mr Fabius simply noted that the finance ministers were "pragmatic people" who would act when necessary. Regarding the idea of a permanent presidency, he pointed out that he would not propose this to his colleagues.
- Follow-up to Prague meetings. According to Mr Fabius, the Eurogroup examined what happened at the G7 last week and returned to the exchange situation and to the success of the intervention on the euro. He specified that the ministers had welcomed the decision on intervention, its preparation, its outcome and its first results, demonstrating that there is very broad agreement for making the euro recover. He stressed that the operation had been strongly supported by the G7. To the question of knowing whether the ECB was intervening to maintain the euro at 88 US cents, Mr Duisenberg recalled his doctrine regarding interventions: "When they have taken place, I shall tell you but not before!". Furthermore, regarding demonstrations against globalisation, Mr Fabius admitted the need to be attentive as to how we explain the working of international organisations, but added that globalisation is a fact and to oppose this "does not make much sense!". The dismantling of the IMF and the World Bank would, according to Fabius, lead to the "weakening of the poorest". Whence, the only solution is simply to render these institutions "more effective, have them listen more, render them more legitimate".
- Commission initiatives in field of statistics. The President of the Eurogroup welcomed the fact that the Commission was now "able to publish key-indicators" for the euro zone, as well as "advanced indicators by the end of the year".
- Practical euro. The members of the Eurogroup for the first time studied the "scoreboard" that should enable them to check whether the march towards the introduction of coins and notes in euros was smooth.
