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. Last Updated: 07/27/2016

Four in Five Germans: Nix EU Currency

The news from France and Germany is not encouraging, former European Commission president Jacques Delors observed recently. Indeed not.

The European Union is less than three years away from the moment when it is supposed to launch the Euro, the newly christened single currency, yet economic and social conditions in France and Germany are so difficult that it is far from clear that the project will get off the ground.

Unemployment has just touched 3 million in France and 4 million in Germany -- the highest level since Hitler's time -- and politicians in both countries fear that unless more jobs are created quickly, public opinion will turn decisively against monetary union.

In fact, German public opinion may already be moving in that direction. According to an opinion poll released last week by the respected Forsa institute, 43 percent of Germans do not want to go ahead with the Euro and another 41 percent want its launch postponed beyond the Maastricht treaty's deadline of January 1999.

Even if Germany, France and a handful of other countries meet the Maastricht conditions on low budget deficits and public debts in time for the planned 1999 lift-off, there must be a question mark over the Bonn government's willingness to proceed with a project that arouses objections from more than four in five Germans. Of course, the other point is that Germany and France are finding it difficult to meet the Maastricht criteria -- specifically, the condition that participants in monetary union must have a budget deficit in 1997 of 3 percent or less of gross domestic product.

With a determined effort to squeeze public spending, Germany and France may make the Maastricht grade on schedule. But at what price? Both Chancellor Helmut Kohl's center-right coalition and the Gaullist government of Prime Minister Alain Jupp? unveiled plans last week to boost their economies and create jobs, while maintaining firm controls on public spending so that they can meet the Maastricht budget deficit target.

But you cannot have your cake and eat it too. A government cannot take measures to cut its deficit and at the same time increase demand. Other steps, such as lowering interest rates and making labor markets more flexible, may help to stimulate the economy and create jobs, but it is doubtful if they will bring any swift and significant fall in the respective unemployment rates of France and Germany of 11.7 percent and 10 percent.

Jobs probably represent the single most important economic issue for Europeans at the moment. The European Commission, and governments all across the EU, recognize that voters are increasingly associating high unemployment with the grand scheme of monetary union.

In fact, there was serious unemployment in the EU long before Maastricht and, whether or not the treaty existed, governments would need to cut their deficits and reform their hugely expensive social security systems. But if voters perceive a connection between unemployment and the Euro, then governments must address the matter.

It is healthy that EU leaders are finally appreciating the need to respond to public opinion when pursuing the goal of ever-closer European unity. If they had done that at Maastricht, the EU might not be in the mess that it is now. However, there remains a suspicion that, as far as the Euro is concerned, it may be a case of too little, too late.