The Sterling Crisis: Minister talks of a '2-tier' Europe: View from Rome
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Your support makes all the difference.SOME European Community countries are not yet ready for economic union and 'a two-speed Europe is a fact', an Italian minister said yesterday. This is the first official acknowledgement by a minister in either Britain or Italy of the long-term implications of their decisions to suspend membership of the exchange rate mechanism (ERM).
The Italian Budget Minister, Franco Revigilio, did not name the countries, although they doubtless included Italy and probably Britain. He said they should be allowed to adjust more slowly. 'There is a need for those countries which have strayed furthest . . . to get back on course without facing traumatic choices,' he said.
Helmut Kohl, the German Chancellor, asked in Florence whether he envisaged Italy and the rest of the 12 moving at two different speeds, replied curtly: 'It is not true.' Mr Kohl was meeting his Italian counterpart, Giuliano Amato, in Florence. With an eye to the French referendum on the Maastricht treaty on Sunday, they made a big show of unity and confidence about European integration, regardless of the outcome of the vote.
'Europe will go ahead,' said the Chancellor. 'We respect nations' decisions, obviously. But the Federal government will do everything possible in order that (the goals of) Maastricht will be achieved and monetary and economy union will be completed by political union,' he said.
Whatever the tensions between Britain and Germany, the atmosphere between the Germans and the other victims of their high interest rates appeared to be extremely cosy. Mr Amato has made drastic and painful efforts to cut Italy's deficit to comply with the requirements of European economic and monetary union. At their press conference Mr Kohl encouraged the Italian Prime Minister in his efforts but would not say whether he intended to grant Italy credits.
The Italian Foreign Minister, Emilio Colombo, said that Italy would 'certainly' return to the ERM on Tuesday, though at what level remained to be decided. 'Italy will not abandon the monetary system,' he added. The lira continued to strengthen against the mark for the second day running since it left the ERM.
The Chancellor called for an extraordinary European Council meeting 'in the near future, very soon' regardless of the Frech vote's outcome, to tackle the currency crisis and calm the markets. It should take place before the next scheduled summit in December. His host agreed.
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