	ec agrees on need to strengthen ems european community ec finance ministers and central bankers agreed on the need for greater cooperation to strengthen the european monetary system ems against international market turbulence officials said there was a general will to reinforce the european monetary system with all that implies belgian finance minister mark eyskens said yesterday after hosting a one day session of informal talks at this belgian coastal resort the gathering was the first such discussion since the second major realignment of ems parities within nine months in january the system has come under severe strain as funds have flowed out of the slumping dollar and into the dominant ems currency the west german mark sending it soaring against weaker currencies in the system but eyskens said february s agreement between leading western industrialised nations to stabilise exchange rates at around current levels was working and this would allow the ec to speed up its efforts to boost the internal stability of the ems he told a news conference yesterday s meeting agreed on the need for closer coordination among ems member governments of interest rate policies and of interest rate differentials between different countries they also agreed they needed better coordination of exchange market intervention to hold currencies stable both when they reached their fixed ems limits and within their agreed margins but eyskens said this coordination raised a whole range of technical problems and ministers would discuss these further in luxembourg in june on the basis of proposals from the ec s monetary committee and committee of central bank governors he said the ec needed a set of indicators of economic convergence betwen community countries and it was important that interest rates fulfilled this role together with exchange rates and inflation rates the belgian minister whose country presently holds the presidency of the community made clear the meeting had not produced any agreement to move radically forward in developing the ems towards the ec s long term goal of economic and monetary integration we have committed ourselves to reestablishing the normal functioning of the system eyskens said eyskens has repeatedly stressed that he believes the ems has to be reinforced if the ec s plans to liberalise all movements of capital across national borders by are to go ahead ec executive commission president jacques delors told the meeting the authority would put forward proposals for a final phase of capital market liberalisation in october that would include safeguard clauses for member countries for which the move would create difficulties eyskens said the ministers and central bankers also discussed the need to dedramatise realignments of ems parities by letting high ranking monetary officials carry them out by telephone rather than calling a meeting of finance ministers however west german sources said bonn finance minister gerhard stoltenberg was unenthusiastic about the idea british chancellor of the exchequer nigel lawson told journalists that one of the technical issues raised by greater coordination of exchange market intervention was the question of which currencies should be used to intervene and held in central bank reserves he said several ems member countries believed the ems would work better if central banks held each other s currencies an issue of particular importance regarding west germany since the bundesbank holds only dollars in its foreign exchange reserves he said the debate on dedramatising ems realignments reflected a general feeling among participants that the way the january reshuffle had been conducted was unsatisfactory the realignment was marked by acrimony between france and west germany with each side blaming the other for strains in the system that forced the parity overhaul reuter 
