Europe seeks to heal wounds of past year

VICTORY FOR the Maastricht treaty in Denmark has put new pressure on Britain to ratify, but removed few of the uncertainties hanging over the European Community.

The result will 'strengthen the hand of the Prime Minister and all those who are seeking an early ratification', said Sir Leon Brittan, Britain's senior Commissioner. 'I believe that it will have an important effect in my own country. We are all looking forward to the next steps in Britain,' said Hans Van Den Broek, the Commissioner for external relations.

The European Community will press on with its ambitious project for a single currency by the end of the century, but this still depends on Britain, Henning Christophersen, Denmark's Commissioner for economic affairs, said last night. 'We want to start stage two (of European Monetary Union) on 1 January 1994 but we can't do that unless the Maastricht treaty is ratified by all 12 members,' he told journalists crowding into the Commission building in Brussels. Even though Britain, like Denmark, has an opt-out from the third stage of monetary union - a single currency - the project cannot continue without the full ratification of the treaty.

The second stage of EMU includes the establishment of the European Monetary Institute, the forerunner of a European Central Bank. Willy Claes, Belgium's Foreign Minister, emphasised that this would be a key priority of the country's six-month presidency of the EC starting on 1 July. 'I will devote particular attention to EMU,' he said last night. The Commission is also preparing the vital secondary legislation to allow the EC to pursue its goal of a single currency, but has been held up by the doubts that surrounded ratification.

However, it is not just the treaty's travails which are holding back a single currency. The recession is also complicating the task. The Maastricht treaty lays down criteria which every state must meet if it is to participate in the single currency, including the level of government debt. Several countries have said that it is difficult if not impossible to meet these criteria while reflating their economies.

Asked whether the EC might loosen or abandon these criteria, Mr Christophersen referred to the section of the treaty that says the criteria are not fixed goals, but values upon which EC economies should converge. 'I still believe that a majority of member states could meet the criteria,' he said. But Phillippe Maystadt, the Finance Minister of Belgium, has said the convergence criteria should be loosened.

There is growing pressure for the hard-core states to go ahead and form an early monetary union outside the confines of Maastricht. In particular, Germany's economic problems are forcing France to consider whether it can press Bonn for some earlier commitment, according to diplomats.

The mark of the last year on the Commission and on EC plans is deep, and will not be removed even by a British decision. 'The European Community itself has been strongly affected by the Danish 'no',' Mr Christophersen said. But Sir Leon said that 'the last year has not been wasted'. He added that the trends towards openess and subsidiarity in the Community were set to create a new kind of Europe, and the Danish vote was a recognition of this.

The EC will also want to press on with enlargement of the Community. Negotiations are going on with Sweden, Finland and Austria, and Norway has also applied to join. Last night they welcomed the Danish vote. 'It is important that the situation has been clarified,' said Gro Harlem Brundtland, Norway's Prime Minister. 'This is good news for Denmark, Sweden and for Europe,' said Carl Bildt, the Swedish Prime Minister.

The 350 days since the Danish 'no' have been marked by stagnation, uncertainty and lassitude in Brussels, where the Commission has been constrained by fear of provoking public antagonism and a desire to appear more accomodating. 'Europe needs a fresh impetus,' said Jacques Delors, the President of the Commission, in a statment welcoming the Danish decision.

'This vote can give a stimulus to the Community to leave behind a period of gloom and inaction, while our continent is shaken by a tragic violence, while it faces many internal problems, especially economic stagnation and unemployment,' Mr Delors said. But the Commission is also hamstrung by other uncertainties. It is preparing an initiative on unemployment - which bedevils every EC state - and also pressing for an extension of the growth initiative laid down at the Edinburgh summit last year. In its new economic forecasts for the Community, it is expected to underline that growth is likely to be zero this year.

Mr Delors, a controversial figure, did not appear in the Commission last night, apparently still seeking to maintain the uncharacteristically low profile that he has maintained for the last year. The high tension of the evening was symbolised by Bruno de Thomas, Mr Delors' spokesman, who began his comments by saying that 'The Danes have said 'no' by a clear majority'. He quickly corrected himself; but the strain was evident.

(Photograph omitted)