§ Mr. LeightonTo ask the Chancellor of the Exchequer what progress each of the 12 EC member states has made in reaching the convergence criteria of the Maastricht treaty.
§ Mr. NelsonArticle 109j of the Maastricht treaty gives to the Council the responsibility for determining whether or not a member state has met the necessary conditions for entry to stage 3 of economic and monetary union. The Council is required to make this judgment, taking into account reports from the Commission and European Monetary Institute on the extent to which a member state complies with criteria concerning the relative rate of inflation; the Government's fiscal position; observance of the normal fluctuation margins within the exchange rate mechanism—ERM; and long-term interest rates. In addition, the reports must take account of a number of other factors, including the development of the ecu, the integration of markets, current account positions, and unit labour costs and other price indices.
A protocol attached to the treaty lays down figures for the convergence criteria regarding inflation and long-term interest rates. Another protocol sets out reference values for fiscal criteria which, if breached, might prompt a Commission report to the Council on the fiscal position of a member state—such a report being the basis on which the Council would judge whether or not an excessive deficit existed. However, definitions of the indicators of convergence have not yet been fully standardised and figures are therefore only indicative at this stage.
The current position of each member state, in respect of the convergence criteria, is given in the table. The criterion on participation in the ERM is that a member state has respected the normal fluctuation margins without severe tensions for at least the last two years. In particular, the member state shall not have devalued its currency's bilateral central rate against any other member state's currency on its own initiative for the same period. The following member states have been in the narrow band for at least two years: Belgium, Denmark, France, Germany, Ireland, Luxembourg and the Netherlands.
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Latest inflation1 Budget balance2 General government debt3 Longer bond yield4 Belgium 2.2 –6.4 132.2 7.5 Denmark 1.4 –2.0 60.6 8.5 France 2.1 –2.2 48.6 7.8 Germany5 3.7 –3.2 41.8 7.1 Greece 15.0 –16.1 82.9 n/a Ireland 2.3 –1.9 101 .2 49.4 Italy 4.9 –10.2 102.7 13.4
Latest inflation1 Budget balance2 General government debt3 Longer bond yield4 Luxembourg 2.9 22.6 36.3 7.5 Netherlands 2.9 –2.6 77.0 7.1 Portugal 8.6 –6.1 368.6 49.9 Spain 5.1 –4.9 46.3 12.1 United Kingdom 3.0 –2.8 36.5 8.6 1 November 1992; percentage change of consumer prices over previous 12 months. 2 1991 general government financial balance (as a percentage of GDP). OECD Outlook (December 1992), except for Luxembourg (EC May 1992). 3 1991 gross debt of general government (as a percentage of GDP). OECD Outlook (December 1992), except for Luxembourg and Portugal (EC May 1992). 4 Yield on fixed interest government securities on 18 January 1993, except Ireland and Portugal (October 1992). 5 Inflation and government debt figures are for western Germany. Source: OECD and Eurostat.