Niinistö pushes Euro-11 to speak as one

Date: 08/07/1999

By Tim Jones

FINNISH Finance Minister Sauli Niinistö has revived German attempts to make euro-zone monetary policy-makers sing from the same hymn-sheet to avoid spooking the markets.

However, instead of bringing back the gagging order on ministers and officials proposed unsuccessfully by German Finance Minister Hans Eichel ahead of last month's Cologne summit, Niinistö is urging the Euro-11 policy coordination group to come to "common understandings" and present them as the single currency area's policy.

The incoming Finnish presidency wants to end the stream of comments on the external value of the euro from European Central Bank officials and ministers which, according to some market analysts, has helped to drive the new currency down against the dollar.

"Member states in the euro area must formulate common views on key economic policy issues related to their shared specific responsibilities for the single currency. In this way, we can ensure the euro area speaks with one voice," says Niinistö in a letter outlining his plans for the first Finnish-chaired meeting of EU finance ministers next Monday (12 July).

In the letter, Niinistö also restates his controversial proposal to put the Euro-11 group on a formal footing - despite the risk of alarming his British, Swedish and Danish counterparts, who fear being excluded from vital EU decision-making.

Euro-11, which meets before most regular gatherings of all 15 finance ministers, brings together two representatives from each euro-zone country along with the European Commission and an ECB representative.

Although meetings are prepared by the treasury chiefs on the EU's Economic and Financial Committee, Niinistö believes the quality of discussion would be enhanced by issuing discussion points beforehand and conclusion papers afterwards.

"Preparations for the meetings should be improved so as to create a coherent and continuous process, enabling euro-area member states to use the results of these discussions for the benefit of their economic policy," he argues in his letter to fellow ministers.

At next week's meeting, Niinistö will ask ministers how far they want him to go in pursuing the mandate to 'enhance economic policy coordination' agreed by EU leaders at last December's Vienna summit.

He wants ministers to accept three principles: that procedures for drafting and agreeing the EU's annual 'broad economic guidelines' "require further improvement"; that enhanced coordination should be applied to all areas and not just economic policy; and that "greater emphasis should be placed on implementing the reforms" outlined in the guidelines.

Niinistö also promises that the question of policy coordination will be the central topic of discussion when finance ministers meet for their biannual informal discussions in Turku in September.