§ Mr. HanleyTo ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest meeting of the European Community's Economic and Finance Council.
§ Mr. MajorThe informal ECOFIN met at Ashford castle, County Mayo on 31 March for its first detailed discussion of the later stages of economic and monetary union (EMU). I made it clear that we believed it premature to give detailed consideration to the later stages before stage 1 had begun and that the United Kingdom's position had not changed. I repeated our willingness to participate fully in the inter-governmental conference and in its preparation. I made clear our opposition to binding limits on the level of budget deficits, but said that we were ready to contemplate binding rules against monetary financing of deficits and the bailing out of member states, and providing for procedures for surveillance. These rules would be desirable whatever the eventual form of EMU. Legal conditionality might also attach to any Community support loans. I expressed our reserve on the monetary aspects of EMU including the proposed European system of central banks (ESCB). Preparation for the IGC will continue in the relevant committees and ECOFIN will discuss the issues again at our meeting in June.
The German Minister for Finance outlined the latest developments in the preparations for an economic and monetary union between the Federal Republic and the German Democratic Republic. There was a brief discussion about the European bank for reconstruction and development. It was agreed that there should be further examination of the requests from some European countries for association of their currencies with the EMS.