Manchester, 12/09/2005 (Agence Europe) - Reiterating the collective objectives of public development aid (PDA) increases of 0.7% of GDP in 2015 and 0.56% by 2010, the finance ministers of the EU agreed on the text of the common position of the EU on reducing the debt of heavily indebted poor countries (HIPC) and traditional sources of funding for public development aid (PDA), at their informal meeting in Manchester. In their conclusions, they welcomed the decision of the G8 to write off 100% of the debts of the HIPC with international financial institutions such as the IMF, the African Development Fund and the International Development Association (IDA), but reiterate that certain technical issues have still to be decided on by the boards of various institutions.
Among new, innovative financing mechanisms, a group of Member States is to implement the International Finance Facility (IFF); a group of countries has already launched its equivalent for vaccination, the IFFim, and a group of Member States is to implement a contribution taken from the cost of airline tickets to pay for development projects, particularly in the sector of health care, directly or via a contribution to the IFF, according to the common position. Announcing the introduction of a tax on airline tickets at his press conference, the French Minister for the economy and finance, Thierry Breton, indicated that Germany would also be introducing such a system, but Berlin pointed out that nothing was yet to set in stone. In terms of the common text, Germany's position is therefore still in line with those Member States which "are considering whether there is a case for taking part in these initiatives and to what extent, or whether it is better to continue to step up traditional means of funding for PDA". In reality, little progress was noted on this point, as the delegations announced no new commitments and confirmed no decisive plans of action.
The debate on globalisation, on the other hand, was general in nature, with no clear confrontation between the delegations. The CEOs of the companies Unilever (Patrick Cescau), Vodafone (Arun Sarin) and Reckitt Benckiser (Bart Becht), particularly raised the issue of the usefulness of some of the European rules, whilst André Sapir stressed the need to reform inefficient social models in Europe. The Nordic model (Sweden, Denmark, Finland, but also the Netherlands and Austria) is both efficient and fair, he explained, whereas those of the countries of southern Europe (Italy, Spain, Greece) are neither. The Anglo-Saxon model (United Kingdom, Ireland, Portugal) may be effective, but it is not fair, whilst the continental model (Germany, France, Belgium, Luxembourg) is exactly the opposite: it is fair, but it is inefficient, he said. The remedies recommended by the professor from the Université Libre de Bruxelles (ULB) are those taken up in Lisbon strategy: reforms of the employment market (the jurisdiction of the Member States) completion of the single market (particularly services), concentrating the Community budget on research and education. These comments were taken up the next day by Gordon Brown during his press conference, the President of the European Central Bank (ECB), Jean-Claude Trichet, said that he "broadly agreed" with them and the Commissioner for Economic and Monetary Affairs, Joaquin Almunia, described them as being "very close" to the Commission's ideas. The question will certainly be on the agenda of the forthcoming informal summit of October on the European social model and the future of Europe, and also on that of the forthcoming Ecofin meeting, in the form of the initiative in favour of reducing the administrative burden. The finance ministers are also set to hold talks on trade issues at the Council prior to the ministerial meeting to be held in Hong Kong in December, and on this, Mr Brown said: "protectionist pressure represents a permanent risk", which justifies a "substantial liberalisation of trade and tougher multilateral rules, including trade facilitation".
The 25 ministers also reached a political agreement on Portugal's deficit, which will be adopted without debate by the Agriculture Council of 19 September. Following the recommendations of the European Commission, the ministers have given Portugal until the end of 2008 bring its deficit below the threshold of 3%, recommending a reduction of the deficit by 1.5% in 2006 and of 0.75% in 2007 and 2008.
The Council also called upon the Commission and the European Investment Bank to continue their technical work on a European package of support, the objective of which is to set up a mechanism of guarantees to stimulate loans to small businesses in the West Bank and Gaza Strip. The Council will return to this issue in October.
"Our determination has been enhanced by the measures taken today", Mr Brown told the press, with reference to the plank on the fight against the financing of terrorism. On the eve of the fourth anniversary of the attacks on 11 September 2001, the ministers reiterated their offer of international technical assistance to third countries to put in place systems to detect and verify sources of funding. At European level, the ministers urge the working groups of the Council to continue to examine actions to freeze assets and identify fields in which reforms are necessary, working together with the EU coordinator for the fight against terrorism, Gijs de Vries, and the European Commission. Lastly, they stress the need to involve administrative or legal mechanisms at national level with all EU actions.