Brussels, 07/10/2005 (Agence Europe) - The finance ministers of the EU are to meet in Luxembourg on Tuesday for an Ecofin Council, from which few concrete results are to be expected. No decision will be taken either on the Hungarian deficit, or on the reduction of the administrative burden, and only fairly general conclusions are to be adopted on the follow-up of the Commission's action plan on financial services. The day before, the finance ministers of the Twelve are to assess the economic situation of the euro zone, and the measures taken in the various Member States to respond to the increase in oil prices. They will also discuss recent meetings of the G-7 and the IMF in Washington (EUROPE 9035), and differences in growth levels in the euro zone.
The 25 ministers will take stock on the Hungarian deficit, which is at a higher level than anticipated. In July, the Commission was satisfied that the Hungarian authorities had taken adequate measures to improve their budgetary situation, whilst stressing the fragility of this consolidation for the year under way as well as for 2006 (EUROPE 8990). Before the summer, the measures presented by Hungary did seem to be enough to reduce the deficit of 3.6% in 2005, and the Council was due to take position on this in September at the informal Ecofin. However, the subject was removed from the agenda and postponed to the October meeting, as more detailed figures obtained since then indicated to Commissioner Almunia that "the objective of reducing the deficit of 3.6% does not appear to have been of achieved" (EUROPE 9029). In light of recent statistical clarifications, the Commission is therefore likely to review its previous positive judgment on the measures taken by Budapest and adopt a new recommendation at its meeting of 20 October. In light of the fact that the Economic and Financial Committee has 15 days to examine the dossier, the Council will not be able to take position on the basis of the new analysis until the Ecofin Council of 8 November.
Philippe Maystadt, President of the European Investment Bank (EIB), will then report back to the ministers about developments in work on the project to support economic regeneration in the Gaza Strip and the West Bank, further to the withdrawal of the Israeli troops. Once again, he is to detail all the options to implement a support mechanism as part of the FEMIP (Facility for EuroMediterranean Investment and Partnership), the funding programme for the EIB for the countries of the region. Further to the visit of the vice president of the EIB, Philippe de Fontaine Vive Curtaz, to the region in September, the EIB has been able to note progress made on both sides, but the Council will go no further than to call upon the Commission and the EIB to continue their work on the details for the mechanism of guarantees to stimulate loans to SMEs and infrastructure projects.
Neelie Kroes and Charlie McCreevy will also report to the Council on the preliminary results of the investigation launched in July-August in the sectors of payment cards, retail banking and business insurance. Definitive results are anticipated for next year. The UK Presidency will also present a document on improving transatlantic dialogue on regulatory issues in the field of financial services and technical innovations. Despite the limited competency of the Ecofin Council on this point, which lies more in the jurisdiction of the foreign ministers and the Commission, the subject is likely to turn up again on the agenda of the finance ministers, under forthcoming Presidencies of the EU.
The agenda item on improved legislating ("Better Regulation") will not allow any tangible progress to be made towards a common methodology to assess the administrative burden on businesses (EUROPE 8812), and the ministers will go no further than to hold an exchange of views with the President of the Committee of European Securities Regulators (CESR), of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS), and of the Committee of European Banking Supervisors (CEBS). Although the Presidency of the Council of the EU remains highly committed to raise the subject and hopes to speed up the process, the pilot projects carried out by the Commission are still underway and a more substantial discussion, on the basis of the results of these projects, does not seem likely before December at the earliest.
Lastly, the ministers are to adopt conclusions on the Commission's Green Paper of May 2005 on its follow-up to the action plan on the financial services (see EUROPE 8941). In this document, the Commission stresses the implementation of European legislation, the adoption of the legislative proposals on the table (one example of this is the "Solvability II" project for the insurance sector) and the launch of targeted initiatives (one example being cross-border payments). It is likely to publish a White Paper this November on its vision for the financial sector.