News Brief No. 98/7

News Brief: Camdessus Welcomes Greece’s Membership in ERM and Irish Pound Realignment

March 15, 1998

Michel Camdessus, the Managing Director of the International Monetary Fund (IMF), made the following statement:

"I very much welcome Greece’s decision, with approval of its EU partners, to join the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS). The drachma’s new central exchange rate, and the supportive package announced by the government, should provide a sustainable basis for the government’s commitment to join EMU as from 2001. I am encouraged by the authorities’ determination to support the drachma’s ERM entry through fiscal adjustments intended to realize the Convergence Plan’s targets, a forward-looking wages policy, measures to enhance the efficiency of the labor market, and a strengthened structural reform effort, including an accelerated program for privatization and social security reform. These measures are in line with Fund advice, discussed with the Greek authorities in recent months. Firmly implemented, they will enhance the economy’s growth potential and sustain Greece’s nominal and real convergence with its EU partners.

"The upward realignment of the Irish pound, which brings the central parity into line with recent market exchange rates, and the accompanying assurance of tight macroeconomic policies, are also welcome in the context of Ireland's buoyant domestic economic conditions and strong external competitiveness."