Luxembourg, 21/10/2004 (Agence Europe) - After the discussions within Eurogroup (see other article), the Ecofin Council of 21 October in Luxembourg did not come back to the issue of oil prices. On the financial perspectives, discussions centred on the proposal by Michaele Schreyer in favour of greater budgetary flexibility and the creation of a fund for competitiveness. But as may have been anticipated, the delegations are against this, or have strong misgivings. The ministers also called upon Greece to supply all the information about its budgetary deficit to allow the Commission to report back on 16 November. Although the Netherlands got off the hook by presenting corrective measures which are sufficient for the excessive deficit proceedings to be dropped, Greece, Germany, Italy and Portugal may well slip backwards in 2005.
The interinstitutional agreement (IIA) on the financial framework and the annual budgetary procedures of the EU will be discussed during the final phase of negotiations on the financial perspectives, but the Member States have already entered an objection on the flexibility proposal. The Commission, which hopes to improve the current flexibility instrument and increase the amount available under it, proposes the creation of a fund of a billion EUR, to be doubled if necessary, which can be mobilised to implement economic reforms under the Lisbon strategy. After a quick tour de table, almost all the delegations said that they were happy with the current IIA. Most could not see the need for a specific fund to increase flexibility, and no Member State supported the initiative. Ms Schreyer also presented proposals (which were not discussed) on the 2004-2005 anti-fraud action plan and on a regulation on mutual assistance for the protection of financial interests. She also officially presented the Commission's proposals on own resources, but this was merely touched upon. More generally, "many ministers stated that the sums given over to competitiveness and cohesion should not be brought together under a single heading, but should be kept separate", said Council President Gerrit Zalm.
At the Ecofin Council, the Dutch Presidency was able to note, as within the Eurogroup, that measures taken to reduce deficits in 2005 appeared "adequate", which Commissioner Almunia confirmed, announcing that no further corrective measures were planned. Mr Zalm stressed that "all the Member States once again agreed that favourable economic periods should be used to consolidate public finances", but Joaquin Almunia regrets the fact that "the results [for 2004] did not live up to the promises made one year ago, despite a more favourable growth backdrop". At the press conference, Mr Zalm said that extra measures would be necessary for 2005 in four countries. He said that "Germany, Italy, Portugal and Greece are in danger of exceeding the 3% mark unless they change their policy", which Commissioner Almunia refused to confirm before the forecasts are published next week. As the case of Greece was taken separately, the Finance ministers "welcomed the Commission's initiative and await with interest the detailed report it is to put together on the data going back as far as 1997, as soon as possible". In its conclusions, the "Council acknowledges the willingness and efforts of the Greek authorities (…) to clarify this issue and their request to supply all information necessary to finalise the report before the next Ecofin Council". The Council and Commission may well learn lessons from this on improving the quality of statistics also ("each in the right domain", said Mr Zalm), and on the excessive deficit proceedings.