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Ex-Buba chief

does not expect

'99 start for EMU

FRANKFURT: Former Bundesbank president Karl Otto Poehl said he did not expect the launch of a single European currency to go ahead as planned in 1999 because of slack economic development and lack of political commitment.

"I can hardly imagine that enough countries, especially France and Germany -- without whose participation monetary union makes no sense -- will fulfil the criteria by then (1999)," Poehl told German monthly magazine Spiegel Special.

However Poehl said the issue was overall "less an economic than a political question."

"The governments have already scrapped the first deadline, 1997," Poehl noted. He said no country, except Luxembourg, had made a real effort to meet the convergence criteria laid down in the Maastricht treaty in time for that deadline.

The interview with Poehl, which the magazine said was the first he has given since 1992, was made available on Thursday in advance of planned publication on April 30.

Poehl resigned from the Bundesbank in 1991 after nine years as president and is now a personally liable director of the cologne-based private bank, Sal Oppenhiem jr & Co.

Poehl said it would be best to begin monetary union with the involvement only of "core" European countries -- Germany, France, the Benelux as well as Denmark and Austria.

"That would be relatively easy to accomplish with countries with which we in any case already have practically fixed exchange rates," he said.

Poehl said it would be almost impossible to form a commmon currency with countries whose inflation rate was double that of core countries or whose currencies had devalued against the mark steadily over the last 10 or 20 years.

Such a small common currency area would inspire countries like the U.K., Italy and Spain to align their currencies with what Poehl referred to as the "Euro-zone".-Reuter