Vote Should Calm Currency Markets, Finance Ministers Say
European finance ministers said yesterday that the apparent narrow French approval of tighter European unity should calm troubled financial markets, but during a two-hour meeting at the International Monetary Fund here they came no closer to resolving economic policy differences that helped drive currency markets into turmoil during the past two weeks.</br></br>The French referendum results helped bolster the French franc on markets last night, but concern remained about the fate of the British pound and Italian lira as the European ministers made little headway toward getting Italy or Britain back into the European Monetary System (EMS).</br></br>Fearful that Britain's suspension of its membership in the EMS last week could fan inflation fears and drive up long-term interest rates in Britain, Britain's Chancellor of the Exchequer Norman Lamont strongly reasserted his government's determination to continue its fight against inflation. "We are not going to throw away our hard won gains when success is finally within sight," he said.</br></br>But at the same time, Lamont said that the European monetary system had forced Britain to keep a tighter monetary policy than it needed to achieve lower inflation.</br></br>Lamont held out little hope of Britain rejoining the EMS soon. He warned that the close French vote showed that economic arrangements in the 12-member European Community must be reconsidered.