Brussels, 03/12/2002 (Agence Europe) - Economic and Finance Ministers from Member States in the Euro-zone, who were in Brussels for a Eurogroup meeting on Monday night, have confirmed the European Commission's autumn growth forecasts (0.8% this year and 1.8% in 2003) and have taken note of the Euro's progress on the international scene. Commissioner Pedro Solbes presented his most recent communication on the improved coordination of economic policies and confirmed that procedures launched against France and Germany with regard to their deficits will be examined by the Ecofin Council on 21 January 2003.
The Acting President of Eurogroup, the Greek Finance Minister, Nikos Christodoulakis, repeated that, "growth for 2002 is expected to be slightly lower than forecast" and confirmed the figure announced by the Commission's most recent forecasts. Next year, Eurogroup, like the Commission, are counting on growth of 1.8%. The Minister noted that, "the Euro-zone is going to see a certain number of its parameters improve, which will have a positive effect on consumer confidence". Mr Christodoulakis also pointed out that the fall in oil prices could also contribute to adding dynamic to growth in 2003. "If things turn out as expected, we should be able to expect a particularly healthy rate of 2.7% in 2004", he added optimistically. Eurogroup stressed that the Euro was gaining ground on the international scene, particularly as a foreign exchange currency, where it represented 30% of international transactions. Mr Christodoulakis was also pleased that the Euro was becoming a currency that was being increasingly used in reserves (15% of all international currencies).
On the subject of price hikes, Pedro Solbes indicated that his services were expecting an inflation rate of 2.3% in 2002, 2% in 2003 and 1.8% in 2004. The Eurogroup President and Mr Solbes confirmed that public deficits in Euro-zone countries would reach 2.3% of GDP and that proceeding against France and Germany would be examined in January. Mr Solbes explained that the recommendation of the Economic and Financial Committee (EFC) on the budgetary situation in Germany complied with the remarks and comments made by the European Commission. Mr Solbes acknowledged that certain elements in the Commission's recent contribution on a more coherent interpretation of the Stability and Growth Pact appeared to pose more problems to certain people than to others but he himself was convinced that what the Commission had proposed was reasonable, based on economic logic and in the interest of EMU and the Euro.
A fall in interest rates expected by some Ministers
On Monday in Brussels, some Ministers were expecting a fall in the main interest rates to be announced by the European Central Bank on Thursday. Dutch Finance Minister, Hans Hoogervorst, declared before the Eurogroup meeting that everything appeared to suggest that the ECB would be allowing for a margin for bringing down interest rates. His Austrian counterpart, Karl-Heinz Grasser, said that such a move on the part of the ECB would be psychologically important for the Euro-zone. The Belgian Minister of Finance, Didier Reynders, "hoped" there would be a movement in this direction on Thursday. Mr Reynders added that the ECB President was aware of the slowdown in growth, "which is not all that positive, especially in Germany". Mr Reynders also explained that that inflation trends were not worrying.
Before the Eurogroup meeting took place, a "macro-economic dialogue" took place, which brings together Finance Ministers, the ECB President, Wim Duisenberg, European Employers (UNICEF) and the European Trade Unions Confederation (ETUC) twice a year. One of the participants at these confidential discussions indicated that Mr Duisenberg appeared to have decided about lowering interest rates and had stressed that inflationary dangers appeared to have dampened.