Brittan: serious differences over EMU

Brittan: potential solution

Brittan Optimistic on EU Compromise

France is digging its heels in and demanding that job-creation measures must not take second place to economic measures required to qualify under the Maastricht Treaty for single currency membership.

Intensive efforts are underway this weekend to heal the rift between France and Germany over the issue. Finance ministers are meeting ahead of the Amsterdam summit to discuss France's proposals for job creation.

Sir Leon, a vice president of the EU Commission, said: "There is a serious problem but there is a potential solution to it."

"There is a determination to find that solution. I therefore think it is probable, though not certain because you can dig yourself into a hole, that there will be a solution this weekend," he told BBC Radio 4's Today programme.

He said EU Commission President Jacques Santer would try to help find a way forward.

Asked if he believed that by the end of the summit on Tuesday the single currency would still be on course to start on January 1, 1999, Sir Leon said: "I think that is highly probable but there is always a risk of someone digging themselves into a hole. But there is a desire to achieve that."

He did not know if the problems over France's hostility towards the so-called stability pact, devised by Germany to regulate single currency members, would be solved before or at Amsterdam.

But he said the way forward was to recognise that the convergence criteria - to ensure countries' economies were broadly in line before joining EMU - were basically founded on the principles of sound finance.

The other part of the solution was to add a "greater concentration" on sensible employment policies, recognising from the experience of countries like the UK and Holland that structural change and a flexible labour market, not simply spending money, was the way to create jobs.