LONDON -- European finance ministers said yesterday that they opposed a "two speed" approach to monetary unification that would allow one group of nations to proceed quickly toward a single currency while leaving others to deal first with domestic economic problems.
The statement came at the end of a day in which European currency markets remained relatively stable. The franc gained in value against the German mark, removing the French currency from any immediate danger of devaluation.
(The dollar closed below 120 yen in New York, falling to 119.65 yen yesterday from 120.75 yen late Friday, as currency traders grew increasingly concerned about the weak United States economy and the presidential race, and sought a haven
from the dollar and the turbulent European currencies. The dollar opened down still further early today in Tokyo.)
Most European stock markets fell sharply, and analysts said investors were not yet convinced that the financial turmoil of the last several weeks was over.
For now, at least, the currency crisis in Europe has ebbed. The French franc rose in value to 3.3673 per mark at the close of trading yesterday in London, stronger than its close Friday of 3.3820 and well away from the floor price of 3.4305 to the mark allowed under the exchange rate agreement.
The strains on some countries remain evident. Ireland, despite a severe recession and the highest unemployment rate in the European Community, pushed a key short-term interest rate up by three points, to 13.75 percent, yesterday to defend the value of the punt.
The finance ministers, meeting in Brussels, issued a statement supporting their system of stable exchange rates and urging that all 12 European Community nations maintain their efforts to achieve a coordinated monetary policy and a single currency by the end of the decade.
They tried to quell widespread speculation that Germany was set to lead a group of countries including France, Belgium, the Netherlands and Luxembourg onto a "fast track" approach to monetary union.
"Everyone present emphasized their opposition to the concept of a two-speed Europe and reiterated that the object of the community was to proceed together," they said.
The statement said the exchange rate agreement, which was left in tatters after Britain and Italy with drew earlier this month and Spain was forced to devalue its currency, should remain a key element in quashing inflation and bringing the diverse European economies into step with one another.
But the ministers did not say whether they would address the shortcomings in the exchange rate mechanism that became evident as the British pound, the Italian lira, the Spanish peseta and other currencies were swamped by waves of speculative selling.
British officials have called the exchange rate system flawed and have been pushing for discussions on ways to reform it when the heads of the European Community nations meet Oct. 16 in Birmingham, England to try to salvage their treaty on European unification. But the finance ministers of several other countries told reporters yesterday that they did not expect any significant decisions about the monetary system at the meeting.
"We shouldn't be talking about the failings of the European Monetary System, but rather about the failure to apply the rules of the EMS properly," said Horst Koehler, an official in the German Finance Ministry.
His statement suggested the continuing tensions between Britain and Germany over the causes of the currency crisis. British officials have blamed Germany for not blunting the rise in the mark by reducing interest rates; German officials in turn have suggested that the pound needed to be devalued and that Britain should have done so within the monetary system rather than pull out of it.
The uncertain outlook for Europe's economies also hurt equit markets yesterday. In Frankfurt, stock prices fell 2.5 percent as measured by the DAX index of 30 leading shares.
"Within Germany there are worries that the Bundesbank's tigh monetary policies will slow the economy down and that the strength of the mark will hurt exports and dampen expectations for earnings in '93," said John Reynolds, the director of global strategy for County Natwest Securities in London.
BIn Paris, shares fell 4 percent on the CAC-40 index. Analysts said investors had decided there was little chance of an interest rate cut in France any time soon, despite the relative stability in the value of the franc.
Prices also fell by more than 1 percent in Zurich and by nearly 4 percent in Stockholm.
In London, which has seen a sharp rise in prices since Britain pulled out of the exchange rate mechanism and cut interest rates, shares fell yesterday as investors stopped to take profits, analysts said.