Brussels, 10/02/2005 (Agence Europe) - The Stability and Growth Pact (SGP) will once again be high on the agenda for the Ecofin Council on 17 February in Brussels. They will decide notably on the follow-up to the excessive deficit procedure against Greece, the pluri-annual programmes of several Member States and the problems posed by the budgetary statistics. The ministers will above all try to male progress on the reform of the Pact, with the aim of being able to draw up specific orientations at their meeting on 8 March to be sent to the Heads of State and Government at the Spring European Council on 22 and 23 March. The Eurogroup, which is meeting the day before, will deal principally with this issue.
Although following the last Ecofin Council (EUROPE of 19 January, p.6), Jean-Claude Juncker said on the subject of the adjustment of the Stability Pact “extreme positions have been abandoned”, these positions do not yet entirely converge. The ministers are therefore likely to ask the Economic and Financial Committee to extend their work between now and the next Ecofin Council (8 March). The issues on which the Member States have yet to agree include the definition of “good periods” of economic performance, the policies or spending covered by the term “structural reforms”, taking account of debts and/or structural reforms to differentiate medium-term objectives and taking account of “relevant factors” in determining the existence of exceptional circumstances. In January, the Member States agreed that the time period granted to take effective measures to improve their public finances (article 104(7)) would be extended from four to six months and to get the budget deficit below 3% of GDP to one year. On the issue of public debts, however, opinions remain very divided between those who want qualitative criteria (relative flexibility) and those who favour a more rigid framework which sets stages for reducing the debt.
Concerning the implementation of the Pact, the ministers will decided on the Commission recommendation demanding the application of excessive deficit procedure to Greece. According to the Commission, Greece should apply its 2005 budget as rigorously as possible and take additional permanent measures in 2006 in order to get its deficit below 3% by the end of next year (see EUROPE of yesterday, p.10). Having subscribed to the Commission's analysis regarding Austria, Luxembourg, the Netherlands, Sweden and the Czech Republic, the Council will adopt opinions on the updated stability and convergence programmes for eleven Member States (EUROPE of 3 February, p.10). The Member States in question are France, Germany, Italy, Ireland, Belgium, Finland, Denmark, Poland, Slovakia, Estonia and Malta. The Commission is due to examine the programmes for the other nine Member States next Wednesday, including that of Greece, which will submit a new programme taking account of the procedure against it for excessive budget deficit. The Council will give its decision on these programme at a later date.
The ministers will also adopt conclusions on the Commission communication aiming to enhance statistical governance (EUROPE of 29 December, p.7). At the Council's request, the Commission's strategy on this matter will be adopted by June.
In the framework of preparations for the Spring European Council on 22 and 23 March, the ministers will adopt updated conclusions on the Broad Economic Policy Guidelines (BEPGs) and will discuss the options set out in the text (EUROPE of 28 January). They will have an exploratory debate on the Commission's spring report on the Lisbon strategy as well as some issues which will be dealt with at the European Council. The work for the Heads of State and Government will be prepared in detail by the Ecofin Council on 8 March.
Having met with Tony Blair and Jacques Chirac, Jean-Claude Juncker declared that he was a little more optimistic about the chances of reaching an agreement in June on the financial framework for 2007-2013 (EUROPE of 9 February, p.7). the Luxembourg Presidency will focus on advancing the work in the knowledge that the situation will only really be settled once there is a compromise proposal (end of April/beginning of May). The Foreign Affairs Ministers will examine the spending in the category “competitiveness for growth and employment” at the next General Affairs Council on 21 February (EUROPE of 1 February, p.11).
The financing facility which the European Investment Bank (EIB) wants to set up for the reconstruction of the countries affected by the Asian tsunami (“Indian Ocean Tsunami Facility”) will probably be dealt with by the Finance Ministers on 17 February over breakfast (EUROPE of 19 January, p.8).