Brussels, 06/03/2003 (Agence Europe) - On Thursday evening, Economy and Finance Ministers from Member States in the Euro-zone, under the Chairmanship of their Greek counterpart, Nikos Christodoulakis, discuss the common strategy to follow and measures to take in order to tackle the economic and budgetary consequences of a possible war with Iraq. With this in mind, Eurogroup examined in detail, the technical document released by Commissioner Pedro Solbes' services on the different scenarios that could arise from a conflict (EUROPE 22 February p 8), in vice f finding a coordinated response to tackling oil princes.
Ministers also took note of Mr Solbes' presentation of the developing economic and budgetary situation in the Euro-zone and world at large. The Commissioner pointed out that the uncertainties resulting from a possible conflict in Iraq have had a significant impact on growth forecasts, which will revised downwards April's forecast of 1.8%. This slowdown in growth will certainly have an impact on budgetary policies. The Commission believes that war figures among the category of exceptional events included in the Stability Pact, which could accommodate a less strict interpretation but which does not mean that the public budget of a country could supersede without impunity the fateful 3% GDP threshold.
Eurogroup also discussed some major questions to tackle in the context of elaborating the Broad Economic Guidelines for 2003 (a discussion that is expected to continue on Friday at Ecofin, see other article) and the 2nd Generation Exchange Rate Mechanism (ERM II) in the context of enlargement of the EU.