Brussels, 27/11/2000 (Agence Europe) - The Eurogroup meeting, which preceded the Ecofin session late Sunday afternoon devoted to taxation (see other article above), was considered "very positive" by its president, French Finance Minister Laurent Fabius. Commissioner Pedro Solbes and he presented the results:
- Economic situation and prospects. In the light of the Commission's autumn forecast, the finance ministers of the euro area noted that growth was positive and confirmed it would remain "sustained", which should entail a "regular decrease in the rate of unemployment". They also noted that it was, on the whole, not inflationary, even though some Member States must be vigilant given what is happening on the oil front". Mr Fabius pointed out he has the feeling, when comparing the "evolution of the three large monetary areas, that the strategy followed since the European Council of Lisbon is the right one". He went on to specify: "there can always be risks, but risks are from the outside. The internal development of the euro zone is, for its part, very satisfactory". He specified that the "elements of uncertainty" were, among other things, linked to oil prices, to the exchange markets and to the situation "in other large areas such as the Japanese zone". In the euro area, on the other hand, "fundamental elements are positive", even if it is important to "monitor what is happening regarding budgetary consolidation" ("All governments are aware of this, he added). Pedro Solbes, for his part, welcomed the fact that the economic situation is the "best for ten years". He announced the Commission would publish a study on the new economy next week.
- Mr Fabius welcomed the fact that the Commission had, for the first time, published its new indicator of industrial activity for the euro area. This indicator shows, explained Mr Solbes, that the euro area had 'reached a summit in June" and that the climate then "came down a little, to become stable at a higher level in October". The next update will be next week.
- Euro exchange rate. This theme was briefly tackled by the ministers with no new elements pushing them to question their point of view that the "euro is under-valued" compared to the dollar. Potential appreciation of 20% seems to be a "reasonable figure", considers Mr Fabius. When invited to say what would happen if the euro recovered too quickly, the president said: "This will be the subject of the next press conference!" This was only half in jest since Mr Fabius explained the Eurogroup was really reflecting on this, mainly in the light of the fact that the American trade deficit is "enormous and that it is growing in the extreme". From now on, "when we compare figures, many elements are in favour of the euro area", said Mr Fabius, who recognised that markets are taking their time.
- Budgetary situation. "We must continue to act in a determined manner at the level of deficits", explained Mr Fabius (Mr Solbes, for his part, pointed out that the Commission insisted the Member States should "do a maximum from the point of view of the evolution in public spending") specifying that this implied "improvements". He added that the members of the Eurogroup had three aims: - development of growth; - reduction of deficits; - tax reform.
- Practical aspects of introducing the euro. In the light of the "score board" drawn up each month by the Commission, the Eurogroup took stock of the situation and noted, according to Mr Fabius, that it was necessary to "speed up preparations" by giving impetus from 1 January 2001. The Eurogroup president felt the European Council of Nice could take this point up again.
- Working methods of the Eurogroup. While noting that their venue was working increasingly better, the ministers agreed, says Mr Fabius, to confer a "proactive nature" on their work as well as "greater visibility and greater transparency". They also continued with "better coordination", which will bring them to consult with each other before taking national decisions.
