Brussels, 02/12/2005 (Agence Europe) - In the evening of 5 December, the finance ministers of the Twelve will examine the general economic situation of the euro zone on the basis of a report by Michael Depler, Director of the Department for Europe of the International Monetary Fund, who is to take part in the meeting. Furthermore, the Eurogroup will analyse the budgetary situation of the Member States in the wake of the autumn report of the Commission (EUROPE 9070). "This chapter is closed, we are looking forward", said a source close to the dossier when asked about interest rates in the euro zone, but the increase decided upon by the ECB on Thursday (EUROPE 9080) may be discussed during talks about the meeting of the G-7 of finance ministers and Central Bank Governors to take place in London this weekend.
On 6 December, the Ecofin Council will, as a matter of priority, seek an agreement on the regime of reduced VAT rates, as directive 1999/85/EC on a reduced rate of VAT for highly labour-intensive services expires on 31 December. The Presidency states that it is determined to reach an agreement on Tuesday; there is, therefore, no point in trying to agree any later (at an extraordinary Council held at the end of December, for example). In the view of the Presidency, the approach which it presented in its compromise on the basis of the Luxembourg proposals is the only possible formula (see EUROPE 9045). On taxation, the Council will take note of a report on the implementation of the code of conduct to fight harmful tax competition within the EU. The ministers will also discuss the work of the Commission on the EU policy in terms of financial services, over the next five years.
The Council will also take stock of initiatives undertaken "globally" to fight the increase in oil prices. In September, when several governments were planning measures, Ecofin called on the Member States not to react too individually.