Brussels, 02/04/2003 (Agence Europe) - The EU Economic and Finance Ministers will meet in Athens on Friday and Saturday, under the chairmanship of Nikos Chrsitodoulakis, for an informal meeting of the Ecofin Council, largely given over to the economic repercussions of the war in Iraq, but which will also tackle the delicate issue of accession to the Euro by the future Member States. Whether Wim Duisenberg should be asked to stay for a bit longer than planned at the head of the European Central Bank (until the verdict is returned in the trial of Jean-Claude Trichet in the Crédit Lyonnais affair on 18 June) will also be debated, although it does not feature on the agenda.
Discussions will start on Friday at 6pm at Eurogroup level, made up of the twelve Euro-zone Member States. The following subjects will feature:
- economic situation and development at international level: The European Commission, which will adopt its economic and spring forecasts on 8 April, will confirm that growth will be "somewhere around 1%", as Commissioner Pedro Solbes acknowledged at a colloquium in Paris. On the impact of war in Iraq, Eurogroup has already committed to co-ordinated action to slow the increase in oil prices, although it has not specified which measures it envisages (see EUROPE of 8 March, p.5). The Commission has already presented a simulation of the effects of a more or less prolonged increased in oil prices. In one scenario, an average price in 2003 of 40 dollars a barrel would lead to a reduction by 0.1 to 0.5 percentage points in Euro-zone GDP. Another scenario, which Mr Solbes feels is "highly improbable", sees a consistent rise in oil prices over "several years", which could knock European growth down 1%.
- budgetary situation: Eurogroup will be discussing France's budget deficit, following the Commission's decision to open proceedings to lead eventually to inviting Paris to remedy its slipping public finances.
- Wim Duisenberg's successor: The Euro-zone Economic and Finance Ministers will be looking at this subject, although the question is not scheduled for discussion in Athens. Legally, keeping Mr Duisenberg in his post does not require a formal decision by the Heads of State and Governement, as his mandate theoretically lasts until 2006. Several sources claim that Mr Duisenberg may be asked to continue his term for between three months and a year. According to an official agreement concluded at Head of State and Government level in 1998, Mr Duisenberg was to step down (on 9 July, his 68th birthday) for the current Banque de France chairman, Jean-Claude Trichet, to take over. An agreement will be reached shortly on the successor to Sirkka Hämäläinen, whose mandate ends next June. There are two candidates in contention: the Austrian Gertrude Tumpel-Gugerell and the Belgian Paul de Grauwe. The choice will then be confirmed by the Heads of State and Government.
Aside from the renewal of discussions on the economic situation (development in terms of inflation, consequences of war in Iraq), the Ecofin Council, which will meet at 9am on Saturday, will also be discussing accession to the Euro by candidate countries(see EUROPE of 8 March, p.6), and various subjects related to financial services (Lamfalussy report and financial reports). The Ministers will begin with a working breakfast on the European Convention.