Manchester, 12/09/2005 (Agence Europe) - With the professional categories hit by the hike in oil prices bringing the pressure to bear on the governments of the Member States to take action, the declaration adopted at the informal meeting in Manchester by the finance ministers of the 25, and the declaration of the Eurogroup, mentioned only non-fiscal measures, which will not cause competition distortions (see EUROPE 9024). In their declaration, which was adopted on Saturday, the ministers underlined their effective and continuous coordination in reaction to the growing oil prices and agree that tax distortions and other forms of political intervention, which would prevent the necessary adjustments, are best avoided. They add that whenever short-term, targeted measures had been taken in order to alleviate the impact of high oil prices on the poorest groups of the population, these should avoid all distortion effects. A heating allowance, which was raised on Friday by the President of the Eurogroup, Jean-Claude Juncker, may therefore be possible, as is non-fiscal aid to certain sectors, as long as these do not gain an advantage over their rivals in other Member States.
The Belgian Minister for Finance, Didier Reynders, however, warned at the risk of side-slipping between the declaration of the Twenty-Five, which affirms a willingness to work together, and the appearance "of highly individualist actions being taken on a range of countries". On the reduction of pump prices decided upon by French oil companies under pressure from the government, Mr Reynders said that he hoped that this procedure would be repeated throughout the EU. There is a risk of competition distortion once we start touching transport, he explained, hoping to avoid reductions in one Member State being offset by increases in a neighbouring country. He announced that he was to draw up "a list of measures taken by the Member States" between now and the next few Ecofin Councils, in order to ensure that this strict position adopted in Manchester was respected to the letter.
According to the ministers, in the absence of underlying inflationary pressure and thanks to timely political reactions, the impact of the spiralling petrol prices on the world economy should remain "limited". At the end press conference, the Chancellor of the Exchequer, Gordon Brown, issued a clear call for a "global" response to the problem of crude oil prices. The declaration of the Twenty-Five stresses that dialogue should be continued with the oil-producing countries and calls for the oil companies to "increase their investment in their exploration, production and refinery capacities in favour of alternative energy sources". The ministers also underline the importance of energy efficiency and energy savings, innovative technologies and the use of new sources of energy. Speaking to the press, Gordon Brown reiterated the fact that "all countries, on all continents, have responsibilities", highlighting that this did not exclude the United States. Better transparency of the markets, with particular regard to their functioning and the current state of stocks, is also necessary, the declaration underlines.
"The OPEC countries told us last month that they would increase their production by half a million barrels a day and then, if necessary, would increase it by a further half a million barrels a day before their meeting of 19 September. We think that this increase should happen", said the president of the Council, who feels that this should be accompanied by longer-term plans, thus indicating expectations of signs at the forthcoming meeting of OPEC on 19 September.