Chirac, Kohl Seek To Calm Monetary Jitters

Their comments after talks in the southwestern French town of Perigueux followed 10 days of fierce debate over a call by ex-president Valery Giscard d'Estaing for a depreciation of the franc to revive economic growth and combat record unemployment.

Chirac pledged in a brief statement standing alongside Kohl that he supported a stable franc-mark parity.

I confirmed the French position on the stable relationship between the franc and the mark, as the Prime Minister Alain Juppe said the other day in the National Assembly, he said.

Kohl in turn said he was satisfied that France had once again spelled out its commitment to the criteria for launching European economic and monetary union in 1999. I am happy that the criteria have once again been confirmed here, the chancellor said.

The discussion sparked by Giscard d'Estaing's call, which drew significant sympathy on the back benches of the president's own Gaullist RPR party, depressed the franc and triggered a series of statements in Paris and Bonn aimed at reassuring currency markets.

But this was the first time Chirac had spoken out in public on the monetary issue since Giscard d'Estaing made his call.

Kohl said he did not wish to interfere in France's domestic politics but he had issued a joint statement with Juppe to make clear they agreed on currency stability.

The chancellor said he was convinced European economic and monetary union was of crucial importance, both in giving the European Union strength in relation to the dollar and the yen, and in creating jobs.

Chirac said they discussed the legal status of the euro, without giving details, and they would continue their discussions at a regular dinner in Paris on Tuesday evening. The pretext for the first of four meetings they will have in the next two weeks was the award of a French culinary literature prize to the chancellor's wife.

Hannelore, for her best-selling book Gastronomic Journey through Germany.

But Kohl took the opportunity to convey a political message to the French, urging them to have faith in Europe and in monetary union.

There is no reason to be pessimistic. There is no reason to be afraid of Europe, he said in a brief joint appearance with Chirac at a gastronomic book fair.

Food and wine are part of the joy of living that is necessary, especially at a moment when pessimism is spreading considerably in Europe, the chancellor said.

He stressed that a more united Europe would not be grey and uniform but would retain its diversity.

We Germans and French are right in the middle of this enterprise, not because we are necessarily the strongest but because we have fought longest for this enterprise. It is our duty to succeed, he said.

He said he was happy to be able to write a new page in the history of European integration with Chirac.

Of course, there will be difficulties. But difficulties are made to be overcome and we will succeed, Kohl said.

Paris and Bonn agree in principle on the need for a stability pact to limit the budget deficits of the EU countries which qualify for a single currency in 1999 and impose sanctions on those who exceed the targets.

But France opposes Germany's insistence on putting strict figures on exceptions that may be allowed, and Prime Minister Alain Juppe reasserted on Wednesday the French view that elected political authorities, not the future European central bank, must set European economic policies for growth and employment.