Brussels, 15/10/2003 (Agence Europe) - The Heads of State and Government of the EU Member States hope, on Thursday and Friday in Brussels, to deliver a message of confidence in the economic potential of the EU and to give fresh impetus to the European growth initiative. In order to ensure that decisions are taken during its meeting on 12 and 13 December, the European Council should come to an agreement on the priorities of the growth initiative and clarify the link between this ambitious programme and continued structural reform. Another tricky matter concerns the restraints imposed by the Stability and Growth Pact.
Diplomatic sources state that Germany will underline during the European Council the fact that the growth initiative should guarantee a good balance between crossborder projects and also take industrial competitiveness into account. Furthermore, it will draw attention to the fact that some Commission proposals, such as the rise in the rate of co-funding for certain transport infrastructure projects, could prejudge the next financial perspectives. The Italian Presidency greatly insists on transport infrastructure work but should take into account the determination of France, Germany and the Commission to give at least as much weight to research and development projects (see p.5). Northern countries, which had adopted a joint declaration during the latest meeting of the Ecofin Council, hope to clarify the link between this initiative and the Lisbon strategy, and fear that the initiative will detract attention from structural reforms. Also, they consider that these advantages will mainly benefit the southern countries and therefore want guarantees as to the breakdown of their costs. They also call for the initiative "not to enter into conflict" with the rules of the Stability Pact, the recommendations on the Broad Economic Policy Guidelines (BEPG) and the ceilings for financial perspectives. At this stage, the Italian Presidency proposes that the European Council should underline the fact that this initiative will be compatible with the Stability and Growth Pact and the current ceilings of financial perspectives and will be conform to the commitments set out in the Broad Economic Policy Guidelines.
In the light of the interim report by the Ecofin Council on 7 October, the European Council is expected to invite the Commission, the EIB and the Council formations concerned to establish a programme for rapid start up comprising a list of projects presenting real European interest. The Commission and the EIB are expected to present their reports with a view to a detailed discussion at the Ecofin Council of 25 November. The summit will insist on the transport infrastructure, research and development projects, but also on the need to complete the integrated electricity and gas market in an enlarged Europe.
As far as industrial policy is concerned, the Presidency will take account of Germany and France's concerns. The European Council should therefore stress the need to answer the needs of certain industrial sectors, mainly the manufacturing sector, in order to enhance competitiveness. The summit could invite the Commission to take account of the impact of the Community legislative texts proposed by accompanying them with an impact analysis on business. The draft conclusions refer explicitly to the Commission's proposal which would make it an obligation for the chemicals industry to carry out very detailed testing on certain products, which is highly contested by Berlin.
The European Council is also expected to consider that, after a period of uncertainty, some positive signs are to be seen in Europe and in the international economic environment. It cites the low levels of inflation, oil price stabilisation and better conditions on financial markets, which are all key factors announcing economic recovery, which should be strengthened in 2004.