International Outlook: GLOBAL WRAPUP
-- It always seemed unrealistic. Now Europe's leaders are beginning to admit the 1999 deadline for monetary union won't be met. The latest hint of delay was a proposal by the European Monetary Institute, the European central bank-in-waiting, for a three-year phase-in period beginning in 1999.
Much of the difficulty is coming from Germany, where Chancellor Helmut Kohl is being harried by the opposition Social Democrats for his supposed willingness to abandon the German mark for a suspect Eurocurrency. That is forcing Kohl's government and the Bundesbank to demand tough terms for monetary union. Bonn has persuaded France and other European countries to agree to aim for budget deficits of just 1% of gross domestic product instead of the 3% originally agreed on for economic union. But with Continental economies slowing, governments realize they're unlikely to meet the goals by 1999. Germany's top economists recently suggested that their country wouldn't even meet the 3% target.