A leading figure in Germany's opposition Social Democrats (SPD) said in an interview yesterday that Europe's single currency should not be launched until the European Union set up legitimate democratic institutions. "If the start of the institutional reforms in 1998 fails, then there is no reason why we should go out on to thin ice with the currency," Mr Henning Voscherau, mayor of the city-state of Hamburg, told the Berliner Zeitung newspaper.

"The euro doesn't have to be launched in 1999," Mr Voscherau said. "There is no parliamentary democracy in Europe at the present time."

He complained that the European Commission was not an elected body. German politicians also frequently bemoan the fact that the European Parliament does not have enough power.

Although most German political leaders back the introduction of a single European currency, a clear majority of ordinary Germans are strongly opposed to surrendering the deutschmark.

A small but growing number of political leaders from both the SPD and the conservative Christian Social Union, part of the Chancellor, Mr Helmut Kohl's government, have also begun to raise doubts about the euro with increasing frequency.

In addition, around 80 per cent of German companies are not making enough preparations for European currency union and could face serious consequences, a German management consultancy group said yesterday. Companies need to try to imagine what the changeover to euro, due to be introduced after the start of European Economic and Monetary Union (EMU) in 1999, would mean for their company, Diebold Deutschland GmbH said in the Welt am Sonntag newspaper.

The transition process to the euro would take most companies about two years, Diebold's managing director, Mr Marc Ott, said.