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Kohl Faces Serious Challenge on Euro Launch

Strategic Insights

— 1 min read

As German Chancellor Helmut Kohl prepares to meet with UK Prime Minister Tony Blair and be granted the freedom of the City of London, he is facing a mounting challenge in his efforts to take Germany into the European single currency. The Bundesbank's recent expressions of misgiving, led by Professor Reimut Jochimsen and President Hans Tietmeyer, have sent tremors through Europe and threaten Kohl's prospects in upcoming general elections. The Bundesbank's concerns stem from a lack of preparation by larger EU countries, with Jochimsen stating that only five small countries meet the Maastricht treaty conditions. Germany and France, key drivers of the project, are seen as "trouble spots par excellence."

Key Takeaways:

  • Professor Reimut Jochimsen, a Bundesbank council member, has stated that only five small EU countries (Netherlands, Denmark, Finland, Ireland, and Luxembourg) meet the Maastricht treaty conditions for euro membership, while Germany and France are considered "trouble spots".
  • Bundesbank President Hans Tietmeyer has warned that assuming all 11 aspiring members can join the euro as founder members may be premature, citing Italy's history of profligate spending as a concern.
  • A recent opinion poll shows that 58% of Germans oppose the euro's launch in 1999.
  • Chancellor Helmut Kohl has tied his political future to a successful euro launch, but open signs of dissent by the Bundesbank could be damaging.
  • The decision on which countries will join the euro as founder members will be made at a summit in May, chaired by Tony Blair.
  • Britain has announced that it will not join the euro at its launch in January 1999.

Statistics:

  • 58% of Germans oppose the euro's launch in 1999 (Source: The Sunday Times, December 1998)
  • 11 countries are aspiring members of the euro (Source: The Sunday Times, December 1998)
  • 5 small EU countries (Netherlands, Denmark, Finland, Ireland, and Luxembourg) meet the Maastricht treaty conditions for euro membership (Source: Professor Reimut Jochimsen, The Sunday Times, December 1998)
  • Germany and France are considered "trouble spots" in the euro launch preparations (Source: Professor Reimut Jochimsen, The Sunday Times, December 1998)

Sources:

  • "Chancellor Kohl's Euro dreams are in jeopardy" by The Sunday Times (December 1998)

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