THE debate over economic management in the European Union after the introduction of the single currency heated up yesterday with European Commission President, Mr Jacques Santer, attacking French plans for a G7 style policy making club of countries in the euro adopting countries.
Proposals to set up a "stability council" to act as a political counterweight to the European Central Bank (ECB) are unnecessary because the Maastricht Treaty already provided for a dialogue between the Council of Ministers and the ECB, Mr Santer said.
"Let's stick to the Treaty," Mr Santer said. "For sure, the European Central Bank will be independent, but the Council of Ministers will also be strengthened."
Crucially, Mr Santer's conception of a strengthened Council would involve all IS EU states in increased harmonisation of their economic policies.
The French version would include only those states that adopt the euro.
Germany has already made it clear it will not accept any proposals which compromise the ECB's independence.
Luxembourg's Prime Minister Mr Jean Claude Juncker speaking at the meeting of EU finance ministers, backed the principle of a stability council to allow ministers to "talk but not negotiate" with the ECB.
"That is the way things happen in Germany now, I see no reason why they should not happen in Europe," he said.
Mr Santer called on the German Chancellor Mr Helmut Kohl to do more to win over Germany. "A campaign is needed to convince the Germans the euro is in their interest. This work has not been done yet."
