Mr President, Greece will be the twelfth country to sign up to the euro. Greece does not have to beg to be allowed into the euro zone; it is fully qualified to join the States that will introduce the euro as an effective and definitive means of payment in 2002. In Greece, the economic convergence criteria have been met, as a result of a stabilisation policy implemented most consistently by the Greek authorities since 1996. At the beginning of the 1990s, Greece was considered the sick man of Europe, economically speaking. The rate of inflation exceeded 20%. The European Union officially described the budgetary deficit as excessive. The public sector was notoriously mismanaged. Almost half of the public debt was due to on-going transfers from the state to public undertakings. Today, major international bodies such as the IMF, the OECD, the Commission and even the ECB generally speak very highly of the efforts which the Greeks have made. It must be noted that private operators have also discovered Greece. In recent years, it has become a significant net recipient of foreign capital. The stock exchange has undergone rapid expansion. International rating agencies have improved their rating for Greek loans. The situation is far from perfect, of course. There are still problems, particularly regarding the restructuring of the public sector. The Committee on Economic and Monetary Affairs stresses the following points. Greece must continue to make efforts in order to ensure that the progress achieved in terms of disinflation has a lasting effect. The government must step up the anti-inflationist bias of the economic policy instruments available to it, particularly in the fields of the budget and income policy. Cooperation between the two sides of industry seems essential in order to maintain a situation of non-inflationary growth. Even if considerable progress has been achieved in terms of the implementation of structural reforms, Greece must step up progress in the reforms which are still necessary, including the effective transposition of European legislation into national law. Parliament has been consulted, in the context of a political decision to be taken by the Economic and Financial Affairs Council, after deliberation by the forthcoming European Council. Parliament’s response can therefore only be a political one, in favour or against, like any final decision in a genuine democracy. Greece’s entry into the euro zone does not entail any political risks. Greece is entitled and, indeed, obliged to join EMU. There are probably some economic risks but these are more significant for Greece than for the countries in the euro zone. In joining the euro zone, Greece will be forced to maintain the culture of stability which has been established since 1996, and this involves pursuing a responsible economic policy. This has, however, already created a virtuous circle leading to sustainable, non-inflationist growth, proving that stability is not an end in itself but that it must serve the purpose of healthy growth. The Committee on Economic and Monetary Affairs, by an overwhelming majority, therefore urges Parliament to vote in favour of Greece’s accession to the euro zone in 2001. Mr President, let me add a few more personal observations. I should like to congratulate the Danish and Swedish governments on having decided to consult their citizens regarding accession to the single currency. I hope that the results of these plebiscites will be favourable. In the same way, I should like to see the United Kingdom opt for the single currency in the very near future. The shared objective of the fifteen Member States to create a European Union which is ever more closely bound, particularly comprising an area without internal borders, could not be achieved in full without a single currency. The United Kingdom, as one of the financial capitals of the world, will not be able to claim all the advantages of an ever more integrated European financial market unless it becomes part of it in its own right and takes on all the joint responsibilities and obligations required under Economic and Monetary Union. There are some Members of Parliament who will vote against my report tomorrow, or who will abstain. Some are opposed to the euro, as is their right, while others are attempting to make political capital out of the real concerns which our fellow citizens have regarding the dollar-euro exchange rate. It must be stressed that the euro is a stable currency. Citizens’ purchasing power within the euro zone has remained virtually unchanged since inflation has been, and remains, at a very moderate level. Of course, the value of the euro has fallen in relation to the dollar and, to a lesser extent, in relation to the yen and the pound. Such fluctuations are inevitable in a floating exchange rate system. Even so, the euro has not become a weak currency. In the last twenty years, the Deutschmark has experienced much more extreme variations in relation to the dollar. In 1985, the dollar stood at 3.5 DM. In order to reach such a low level in relation to the dollar, the rate of the euro would have to fall below 0.6 to the dollar. Some people claim that the financial markets do not value the euro because of Europe’s tardiness in implementing structural reforms. What structural reforms did Germany undertake after 1985 in order to ensure that the Deutschmark returned to a rate of 1.7 or 1.8 DM to the dollar? The fact is, the economic position of the European Union is very sound, and is much more favourable than it has been over the last decade. The only grey area is a rate of unemployment which, although falling, is still excessive. A return to full employment is certainly not calculated to please the financial markets most of all. Generally speaking, good news regarding employment makes the stock exchange nervous, as it makes them afraid of a rise in inflation. Financial markets operate according to their own particular logic. They look for immediate returns, and currently this is a safer bet in the United States, particularly because of its higher interest rates. This trend looks set to continue, as the Federal Reserve has just hiked up its interest rates. With their sheep-like behaviour, however, the markets will ultimately come to realise, Mr President, that, in the medium term, the euro will be a more secure currency than the dollar.

Political group: PSE