Germany, France and Italy

Date: 18/09/1997

may well have 1997 budget deficits above the maximum set out in the Maastricht Treaty, but this need not necessarily prevent them from taking part in economic and monetary union, according to the International Monetary Fund. The body's World Economic Outlook forecast 1997 debt of 3.1&percent; of GDP for Germany and 3.2&percent; for France and Italy - all above the 3&percent; set out in the treaty. But it said the criteria should be viewed in the context of cyclical factors, and that the EU economy showed “a very positive level of convergence”. However, the report warned Europe's economy still needed labour law reform to shape up for the global marketplace.