EU finance ministers failed to reach a final agreement on the single currency in talks early this morning in Dublin. The final version of the agreement will be referred to the government leaders at the summit today.
The ministers made considerable progress on the wording of the agreement which has now been finalised. However, the Minister for Finance, Mr Quinn, admitted that the ministers had failed to agree on the precise economic figures regarding the stability pact. These numbers, which had been causing most difficulty during the negotiations, will be inserted into the wording in brackets. Mr Quinn insisted that he was satisfied that he had made considerable progress.
He refused to speculate on whether the heads of government would reach agreement but be said that they had 48 hours to do so.
The figures refer to the level of decline in GDP, which would mean that a country could avoid sanctions. The provisional numbers show that a 1.5 per cent fall would automatically allow a country to avoid any sanctions, while a fall of 0.75 per cent would leave room for an appeal to the Commission.
Mr Quinn is determined to get a deal to wrap a major presidency package on the single currency. The summit, the culmination of the Irish presidency, will also see a debate on an Irish outline text for a new draft treaty, a major report on upgraded EU co operation in the fight against drugs and trafficking in people, and produce a declaration on employment.
Agreement has already been finalised on most of the single currency packaged the relationship between those countries who will be join up for the single currency and those who wont, the legal framework of the Euro and 95 per cent of the Stability Pact which will impose disciplines on Euro participants.
Earlier yesterday, the Germans were playing tough yesterday in the Stability Pact negotiations. The deadlock is over attempts by Bonn to impose very strict, if possible automatic, rules on countries after monetary union. All the other member states, to varying degrees, believe that fines against those who break deficit rules should be subject to political control.
The German Finance Minister, Mr Theo Waigel, insisted to ministers that there could be "no grey areas. There must be no room for argument or misunderstanding." But German sources were saying that Mr Waigel is understood to be keen that the issue should not go to the heads of government, out of concern that Chancellor Kohl would be more likely to do a "political" deal.
The Germans were also very keen to succeed because of fears that the markets may exact a price on the deutschmark if a deal is not done. The challenge for Mr Quinn was to use one fear against another, diplomatic sources said.
Bonn is said to be very nervous ahead of a poll in Stern magazine today showing that 61 per cent of the German population is now against the entire monetary union project.
But as the UK Chancellor, Mr Kenneth Clarke, said, it is "an amazingly narrow point a lot of the discussion will turn upon".
And as the finance ministers arrived they appeared to be reasonably optimistic that a deal would be done this weekend. The Danish Finance Minister, Ms Marianne Jelved, said it should be possible to finish the negotiations. She added that certain countries "have an interest in dramatising the situation but it is not a drama".
The Luxembourg Prime Minister and Finance Minister, Mr Jean Claude Juncker, said he hoped they would reach a workings agreement.