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Waigel insists that EMS is working

Gail Counsell
Sunday 18 July 1993 23:02 BST
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THEO WAIGEL, the German Finance Minister, yesterday insisted that the European Monetary System was working and that the fundamentals of the French and German economies were solid, writes Gail Counsell.

But he made it clear that he would welcome a decision to cut interest rates by the powerful German central bank, the Bundesbank.

His comments come as the French franc and the Danish krone are under intense pressure to devalue. Onslaughts by speculators last week on both currencies are expected to resume today and the next few days will be crucial for the survival of the exchange rate mechanism.

'The European Monetary System is working and I can only say the fundamental data in France as well as Germany are in order,' he said.

In a radio interview in Germany Mr Waigel dismissed international criticism of the Bundesbank for refusing to lower German interest rates last Thursday.

'During the course of the last four years of our monetary history, there were one or two short periods where long-term interest rates were less than 6 per cent,' he said. 'We have the lowest interest rates in Europe outside of Switzerland. So one can't say that Germany is a country with high interest rates.'

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