THE French and German governments are to co ordinate measures to encourage economic recovery in their two countries, and twin announcements will be made in the next month.
The move, intended to dispel doubts about the determination and ability of Paris and Bonn to realise the single European currency, was foreshadowed by President Jacques Chirac at his New Year reception for journalists in Paris yesterday and subsequently confirmed by a government source.
"France and Germany want to co ordinate their calendar for recovery, even if the measures announced here and in Germany are not the same," the source said.
Mr Chirac called for measures to relaunch economic growth, including jobs, to be "coordinated at the European level, notably between France and Germany". He had recently discussed this with Chancellor Helmut Kohl.
An almost immediate clarification from the Elysee Palace stressed that the measures would be subject to France's severe budgetary constraints and would not entail any co ordination of French and German interest rates "The Bank of France today is independent, as is the Bundesbank.
The French German initiative comes only days after Germany announced a sharp deterioration in its economic performance, which if it continues would mean that it could not meet the Maastricht criteria for currency convergence by 1999, the required date. France also faces difficulty in reducing its deficit to the required 3 per cent of GDP.
Mr Chirac said he believed the Maastricht criteria were little more than markers to encourage good economic management. Sound public finances, he insisted, were the condition for a dynamic economy and national independence".
His remarks about Maastricht may have been intended partly as consolation for Dr Kohl, but also as an answer to critics in France those who contend that the urgency of meeting the Maastricht criteria is hampering France's economic recovery and pro Europeans led by the former President, Valery Giscard d'Estaing, who recently attacked what he said was Mr Chirac's reticence over Europe.
Yesterday's Paris reception marked the start in earnest of the French political year, which had been delayed for a week by the death of Francois Mitterrand, and Mr Chirac used it not only to underline the continuing closeness of France and Germany, but also to offer his first cautious mapping of a policy timetable. This timetable suggests that the planned fiscal reform, already postponed for a year, could be postponed until 1998.
