Brussels, 19/06/2002 (Agence Europe) - With a view to the European Council of Seville, the EU Economy and Finance Ministers are to hold a special meeting on Thursday evening in Madrid to seek a compromise solution allowing the adoption, by the Ecofin Council, of the Broad Economic Policy Guidelines (BEPG) for 2002. During the last Ecofin Council (on 4 June), five Member States (France, Portugal, Germany, United Kingdom and Belgium) had expressed varying degrees of reserve on certain paragraphs, but it was France especially that had blocked adoption of the text as it felt it was not able to commit itself to a return to budgetary balance in 2004. France invoked political motives (the holding of legislative elections) as well as technical motives (publication of an audit on public finance, which is at any rate expected before the end of the month of June).
The Spanish Presidency is using every means possible to avoid conflict between France and its partners. Rather than suggesting the adoption by qualified majority of BEPG without France's agreement, it could propose a compromise wording in the text providing for a return to balance in 2004 "in so far as the scenario foreseen for economic growth is confirmed" (i.e. 3% in 2003 and 2004). The Spanish Presidency remarks that this formula is comparable to that adopted in February allowing Germany and Portugal to avoid a warning sanctioning the slide in their public finance. Objections or remarks come from other Member States: - Portugal would like to include in its recommendations the aim of reaching a situation "close to balance", by 2004, and not a situation "in balance", whereas the Commission, for its part, explains that this wording corresponds to the commitments of countries included in its stability programme; - Germany is hoping for the wording to be changed only on reform of its retirement system, "which does not really change anything", it is explained on the Commission's side; - Belgium insists that emphasis should be placed more on indicators relating to the quality of work in the general recommendations; - and the United Kingdom insists that the low level of its public debate should be taken into account in the appreciation made of its compliance with the provisions of the Stability and Growth Pact.
Germany does not expect Stability Pact to be brought into question
German Chancellor Gerhard Schröder said France should, at this meeting, confirm its attachment to the provisions of the Stability and Growth Pact. He added that no country should take on the responsibility of having to open a debate on possible weakening of the Pact. "France has made it known that its public finance audit would end at the end of June. The European Commission and the partners (of France) will then be confronted by a new situation, if there is one", continued Mr Schröder. In his view, the matter will not play an important role during the European Council of Seville as France will have clarified the situation beforehand. After a speech given on Tuesday in Berlin, German Finance Minister Hans Eichel declared that he did not have the "impression that the French government seriously wants to free itself of its obligations fixed in the Stability Pact". He added that his French counterpart, Francis Mer, and himself had come to an agreement to say that there was no alternative to budgetary consolidation. Mr Eichel expressed concern, however, at seeing Europe possibly taking inspiration from the United States, where the authorities have revived a public spending policy.