European Money Plan On Track Germany Agrees In Principle To French Demands

In a bid to save Europe’s plan for a single currency, the German government agreed in principle Wednesday to French demands for a new pact on fighting soaring unemployment.

Foreign Minister Klaus Kinkel said Germany favors a better coordination of national measures to cut joblessness but not “spending programs that can no longer be financed and burden us in particular.”

Germany’s concession - after years of resisting a European Union employment pact - could be decisive in keeping France’s new Socialist-led government among those who support the single currency when EU leaders meet in Amsterdam next week.

France has said it wants to go ahead with the single currency, to be launched Jan. 1, 1999, but has demanded more emphasis on promoting jobs and growth. The EU’s 12.8 percent jobless rate is more than double the levels in the United States and Japan, Western Europe’s main trading partners.

Despite their leaders’ support, many Europeans are wary of the single currency and loath to give up their deutsche marks and francs.

Kinkel said Germany would not seek a delay in the currency, known as euro, because it would be a disaster for Europe’s economy. He said he is confident France’s new government will sign a “stability pact” for the euro at next week EU’s meeting. The pact - demanded by Germany - outlines financial measures that are needed to keep the euro strong.

German Chancellor Helmut Kohl also stressed his resolve to stick to the timetable and the fiscal rules for joining the euro, designed to ensure the money’s stability.

Still, Germany’s $11.7 billion budget shortfall is threatening its ability to meet the financial criteria it has demanded of other countries. Kohl’s squabbling coalition met Wednesday to try to find a solution to that problem, but no results were announced.