Brussels, 05/03/2004 (Agence Europe) - The European Union Member States' finance ministers will be meeting in Brussels on Tuesday to adopt their contributions to the 25/26 March European Council and discuss progress in negotiations with dependencies and third countries over savings tax. Germany is expected to confirm that it supports France in its call for reduced VAT on eating out (see below). The Council will adopt opinions on the Stability Programmes of four Member States (Germany, Spain, Portugal and Belgium), loosely based on the recommendations made by the department of Commissioner Pedro Solbes (see EUROPE of 19 February, p.10).
Over breakfast, the Ecofin Council will discuss a joint initiative by four countries (Ireland, the UK, the Netherlands and Luxembourg) on reforming the regulatory framework. Ministers will attempt to strike agreement over lunch on who will succeed Eugenio Domingo Solans on the Governing Council of the European Central Bank (ECB) (see EUROPE of 2 March 2004, p.10). The Council will discuss the Franco-German initiative to establish an European Centre for International Economics over lunch, based on Anglo-Saxon thinktanks.
In the run-up to the European Council, the Council will adopt a document on the Broad Economic Policy Guidelines for 2004 (setting out the main areas to be discussed). Only one issue remains to be settled - France is opposing the words 'around five years between now and 2010' as a precise target for increasing the average pension age in the EU. In the document, entitled 'Realising Europe's Growth Potential', the Ecofin Council sets out three main priorities for achieving the Lisbon Objectives: (1) promoting growth through investment, innovation and competitiveness (it notes the need to keep a healthy budget situation in line with the Stability and Growth Pact, and ensure price stability); (2) increase flexibility on the labour markets (Member States should commit themselves at the Spring Council to take action on their own labour markets in line with the proposals by the Wim Kok Task Force on Employment); and (3) ensure the viability of public finances (which is only ensured in around half of the fifteen Member States, laments the Council, calling on Member States to anticipate the financial impact of an ageing population by cutting their public debts and stepping up reform in the field of employment, health and pensions).
The Ecofin Council will also be adopting conclusions for the European Council, giving a first assessment, unfortunately pretty limited at this stage, of national measures to implement the European Growth Initiative. In the conclusions, the Ecofin Council admits that it is often difficult to distinguish between domestic measures and measures deliberately designed to support the rapid start-up programme for projects approved by the European Council. It also notes that the initiative was adopted 'too recently' to be able to predict the positive impact of national measures in this connection. The economics ministers note that 'a number' of Member States and acceding countries have already started backing up the initiative through domestic measures (re-orienting public spending to favour investment in physical and human capital and in knowledge) but the impact varies widely from one sector to another: some countries have already made slight changes to their transport infrastructure programmes and revised their budget planning to speed up the implementation of key projects; overall public spending in the energy sector has not changed, despite a few exceptions, but the priority is now renewable energy sources, efficient energy use and interconnection of networks. The initiative has not had any direct impact on the deployment of infrastructure in the telecoms sector.
When its comes to private finance for infrastructure, the Council notes that in 2003, several countries made significant changes to the legal framework for public-private partnerships in order to remove technical, legal and administrative obstacles to private investment in infrastructure. For transport infrastructure, the draft text notes that cross-border projects like the ones listed for rapid start-up are particularly difficult to finance from private sources.
The is also expected to hold an informal discussion over lunch over the successor to Horst Köhler, leader of the IMF (see p.17).