EC MINISTERS WILL DISCUSS STRENGTHENING EMS FLOAT

  European Community finance ministers
  and central bankers meet in Belgium this weekend to discuss
  strengthening Europe's joint currency float amid continuing
  worries about turbulence on foreign exchanges.
      Belgian Finance Minister Mark Eyskens, who will host the
  informal talks, told Reuters the ministers and central bank
  chiefs would discuss the situation on currency markets in the
  light of the February agreement among leading industrialised
  countries to stabilise exchange rates around present levels.
      In an interview, Eyskens said he felt the Paris accord
  between the United States, Japan, West Germany, France, Britain
  and Canada had proved itself "more or less workable."
      But doubts over its effectiveness and durability have been
  growing since fears of a trade war between the United States
  and Japan over computer microchips pushed the dollar to a
  record low against the surging yen early this week.
      The talks, at the Belgian resort of Knokke, are being held
  to coordinate the EC's positions on monetary issues and Third
  World debt ahead of the Spring meetings of the International
  Monetary Fund and World Bank in Washington next week.
      The EC gathering begins tonight with a dinner but the main
  discussions will take place tomorrow.
      Continued international currency turbulence could undermine
  plans for reinforcing the European Monetary System, the joint
  float holding eight EC currencies within narrow fluctuation
  bands, which will feature high on the weekend agenda.
      Eyskens has repeatedly said that Europe needs a period of
  calm on world currency markets, and in particular a more stable
  dollar, before it can set about strengthening the EMS to make
  it more resilient against exchange rate swings.
      The EMS has been taking a battering over the last year as
  the falling dollar has sent funds surging into the dominant EMS
  currency, the West German mark, forcing ministers to undertake
  two major realignments of parities within nine months.
      In the interview, Eyskens made clear he was hoping for a
  wide-ranging discussion on the future of the eight-year-old EMS
  on the basis of proposals for bolstering it drawn up by the
  EC's Monetary Committee and the Committee of Central Bank
  Governors.
      The committees were asked to come up with the proposals
  after the last reshuffle of EMS exchange rates in January.
      Eyskens repeated calls for the European Currency Unit, the
  fledgling EC currency at the core of the system, to take over
  the mark's dominant role in the EMS - a proposal that has met
  with a cool response in West Germany.
      He said EC Commission President Jacques Delors would report
  to the meeting on problems raised by plans to liberalise
  capital movements fully within the 12-nation bloc by 1992, such
  as the need for harmonising taxes and banking controls.
      Eyskens said liberalisation of capital movements without
  strengthening the EMS would be an element of destabilisation in
  the Community. 
      He said the crucial issue in the debate was whether member
  states were willing to push further towards the EC's goal of
  monetary integration on the basis of an EMS that included
  management of exchange rates by some kind of common
  institution, instead of by national central banks as at
  present.
      Plans for the creation of such an institution, foreseen by
  the EMS's founding fathers, have been thwarted by the
  reluctance of some countries, notably West Germany, to gove up
  their sovereignty in the monetary field.
      EMS development has also been held up by Britain's refusal
  so far to join the system's core exchange rate mechanism.
  

