German MPs win veto on Euro-currency

THE German parliament exacted a heavy price for its ratification of the Maastricht treaty yesterday, forcing Chancellor Helmut Kohl's government to give it the final say on whether Germany goes on to the final stage of European monetary union.

The treaty was approved in the Bundestag by 543 votes to 17, but the arithmetic fails to reflect the complexity of a debate that gave full vent to worries about European union.

Under the terms of the monetary union declaration passed with the ratification vote, Bonn will require Bundestag approval in 1996 for a decision to proceed with EMU. In deciding whether to give that approval, parliament appears to have won a potentially large degree of discretion.

The declaration suggests parliament will not limit itself to assessing whether member states have 'statistically' fulfilled the requirements for monetary union, but will want to pass judgement on whether the process has been 'credible'.

Stating that it 'takes seriously the fears in the population about the introduction of a common currency', the Bundestag committed itself to opposing any attempt to relax the stability criteria laid down in Maastricht for entering the final stage of EMU. Many MPs, notably from the Social Democrats, interpreted the declaration as amounting to a parliamentary veto.

Both parliament and the Chancellor confirmed a commitment to Frankfurt being chosen as the seat of a European central bank.

In terms of the declaration on economic and monetary union passed yesterday, the government has now committed itself to respect the parliament's verdict on EMU in 1996.

While all sides agreed that this Bundestag vote will not amount to a 'second ratification', yesterday's debate failed to remove the uncertainty over whether the German parliament has awarded itself what amounts to an opt-out clause by the back door. The wording of the parliamentary declaration was left deliberately vague, and the result is that Chancellor Kohl's much-vaunted 'automaticity', should Germany fulfil the EMU criteria, now appears to be hostage to the political mood of parliament in 1996.

While government officials argued that the parliamentary decision amounts to no more than an additional safeguard against any attempt to ease the EMU criteria, and that it is not a decision about whether Germany wants or not to join monetary union, many MPs took the opposite view. They interpreted yesterday's vote as giving parliament the final say in 1996, not just on whether Germany is ready for EMU, but on whether the performances of other member states make such a union acceptable and desirable.

To the extent that parliament could interpret this as reflecting the mood in the country rather than evaluating economic criteria, then the powers wrung yesterday from an unhappy Mr Kohl would most definitely amount to a German opt-out. Chancellery officials admitted that, in the event of parliament voting against EMU, it would be 'politically very difficult' for the government of the day to attempt to override such a ruling.

In other areas, too, parliament and the German states (Lander), won important increases in their ability to shape future European policy. All future transfers of national sovereignty to the EC will require a two-thirds majority in both Bundestag and Bundesrat, where the states are represented. These amendments written into the constitution will apply whether or not Maastricht comes into force, giving parliament and the states a permanent right of co- decision on all future steps towards European integration. Speaking for the Social Democrats, Heidemarie Wieczorek- Zeul said there would be no approval for any further transfers of powers until the rights of the European Parliament in Strasbourg had been substantially strengthened.

Yesterday's ratification also increased the direct involvement of the Lander in the EC negotiating process, giving the states in certain areas the right to take the Bonn government's place in Brussels discussions.

Leading article, page 24