Franc likely to be dethroned in the battle to set currency rates

Article Abstract:

Financial analysts are starting to have serious reservations about European monetary union, which will inevitably create problems, either because some countries are left out or because weak countries are allowed in. A particularly important issue will be setting the most appropriate rates to give long-term credibility. Against this background, there is little evidence to support the argument that the value of the French franc should be slightly lower, although it is clear that French interest rates should be lower. It is possible to argue in favour of the recent appreciation of sterling and to claim that the appreciation should be allowed to continue.

Prices and rates, Pound (United Kingdom), Franc (France)

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Brussels erects new barriers to joining the club

Article Abstract:

Countries which wish to join the European Monetary Union (EMU), which is set to come into operation officially at the beginning of 1999, will have to meet the criteria set down in the Maastricht treaty, and will also have to take steps to continue to limit their borrowing after they have joined. No firm agreement has yet been reached on this sensitive issue, but Germany has proposed a European Stability Council which would be able to fine European Union countries where the 3% of GDP limit on public borrowing was exceeded. This will have a considerable impact in the UK, even though the UK has the opt-out of the single currency.

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Turning point reached as EMU battle intensifies

Article Abstract:

There have been a number of key developments recently in preparations for European monetary union (Emu). France and Germany are both setting out cuts in public spending which will reduce their fiscal deficits, and are also seeking an agreement which will prevent countries which have joined Emu from operating lax fiscal policies. However, it is still uncertain whether Emu will go ahead on time, or even at all.

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