The German chancellor, Dr Helmut Kohl, has predicted that the euro would be as successful and stable as the deutschmark and that it could become an alternative to the dollar as a global currency. Dr Kohl was speaking at the official launch of the European Central Bank (ECB) in Frankfurt, an event that was attended by hundreds of political and business leaders, including the president of the European Commission, Mr Jacques Santer and the British prime minister, Mr Tony Blair.

Dr Kohl said the international financial world already had great confidence in the euro, six months ahead of its launch.

"In view of the current difficulties in Asia many investors from all over the world are recognising the advantages of Europe and are investing their money in the `safe haven' of the euro area despite low interest rates," he said.

The president of the new central bank, Mr Wim Duisenberg, promised to keep inflation low to win the confidence of Europeans who felt uncertain about the euro. He said Economic and Monetary Union could only succeed if monetary policy was characterised by a single voice and an unmistakably European outlook.

"A precondition for adopting this outlook is that the ECB acts as and is seen to act as a unit and speaks with `one voice,' although sometimes in different languages," he said.

Earlier, Mr Duisenberg reopened the row over his appointment as ECB president, when he insisted in a German television interview that he had been appointed for a full eight-year term. France insists that Mr Duisenberg will step down in four years to make way for the governor of the Bank of France, Mr Jean-Claude Trichet.

The ceremony came on the last day of Britain's six-month presidency of the European Union and Mr Blair underlined his country's willingness to join EMU at a later stage if circumstances were right. He gave no indication of when the time might be right but insisted Britain would do all it could to profit from the launch of the euro in 1999.