16 JUNE 1990, Page 18

Old King Kohl

THAT nice Dr Pohl and that jolly Mr Kohl go well in a Euro-nursery rhyme. No doubt Edward Heath could conduct its first per- formance. It would tell how Dr Pohl looked after the money and wouldn't let anyone interfere with it, not even Mr Kohl, who was happier, anyway, with his pipe, bowl, and fiddlers. Indeed, it is already in use as a lullaby. The story it tells is, however, a fairy story. Mr Kohl is giving the orders, and Dr Pohl at the Bundesbank can say nothing but Vawohr. Dr P. said that German monetary union would take several years. Mr K. gave him six months. Dr P. said that the exchange rates should be two East-marks for one deutschmark. Mr K. said it would be one for one. Mr K. now plans a £40 billion fund to refinance East Germany. Dr P. found this out by reading the papers. Anthony Thomas at Kleinwort Benson wonders who the East Germans put on the Bundesbank Council — and why should they take their tune from Dr P.? There is a moral in this for those who wish we had an independent central bank, or, believing that Germany has one, want to tie us into the European Monetary System and submit ourselves to the Bundesbank's discipline. (The market this week gave the idea another cheery wave.) Those who yearn to sub-contract Britain's economic management to Dr Pohl should decide how they feel about old King Kohl.