GERMANY'S deputy foreign minister said yesterday he was in favour of the strict application of European Monetary Union (EMU) criteria, but said there was room for some interpretation of the budget deficit criterion.
"What is decisive is that we are not moving away from the 3 per cent (deficit to gross domestic product ratio) but are unequivocally moving in that direction, Mr Werner Hoyer, state secretary in the Foreign Ministry, told German radio.
Mr Hoyer, Germany's negotiator at the intergovernmental conference drawing up plans to reform the European Union, said the Maastricht Treaty did not intend the criteria to be precisely hit but rather to be goals in an ongoing process. Finance Minister, Mr Theo Waigel has emphasised the need to meet the 3 per cent deficit target.
Mr Hoyer, a member of junior coalition partners the Free Democrats, said a German IfW economics institute report that sees the deficit at 3.3 per cent of GDP in 1997 should be taken seriously and spur new enthusiasm to reform the economy "not just because of the euro, but because it is decisive for the competitiveness of our country that we finally bring our state finances into order and protect our social security system for the future".
Mr Hoyer criticised suggestions by Mr Waigel outlined last weekend that welfare cuts and even tax "increases could be needed to balance the books for EMU.
"We will not sacrifice the social security of our country on the altar of the euro. Our citizens would never accept that," he said.
