There is no longer a free-market exchange rate for the guilder since the guilder no longer exists as an independent currency. It is form in which the euro circulates in the Netherlands pending the introduction of euro notes and coins in 2002. The same is true for the lira in Italy. Under the stability pact, euro-zone countries are required to maintain their fiscal deficit below 3 per cent. This was originally proposed by the German CDU government, who wanted automatic fines introduced for governments that broke the rule. However the French government successfully insisted that any fines must be subject to political approval by the EU authorities. Even though the the current social-democratic governments in France, Italy and Germany are fiscally conservative, it is difficult to envisage them approving fines. Trevor Evans Paul Lincke Ufer 44 10999 Berlin Tel. & fax: +49 30 612 3951 Email: [EMAIL PROTECTED]
