Brussels, 12/10/2006 (Agence Europe) - On Thursday during a conference organised by the European Policy Center (EPC), the Luxembourg prime minister and finance minister, Jean-Claude Juncker looked at some of the areas in which Europe is building. Reappointed for an additional two years at the head of Eurogroupe, Mr Juncker spoke about the future of the Euro zone, its economic piloting and attempts to balance the budget and the enlargements programmed, as well as several other points on the recent agenda of the meetings he chairs (EUROPE 9283).
On the question of budgetary surveillance, he explained that they would continue to feel incomplete because the work on the preventive part of the Stability and Growth Pact had “hardly been put in place” despite consensus between ministers from the zone to take this aspect seriously. He said that it was time to “digest” that for 2005 and was against any new reform of the SGP. He considered that the economic pole of the Economic and Monetary Union (EMU) was obviously suffering from “structural weaknesses” but that decisions taken in one capital can influence other capital cities and that the “zone has become more of a single zone”. Eurogroupe is now gearing up to deepen horizontal budgetary discussions in an effort to compare the budgetary operations of Member States in more detail. Currently, Mr Juncker explained, “we can use figures that do not show that we are in the same zone”. He attacked the disparity of forecasts on exchange and oil price rates that each Member State takes into account when elaborating its budget. He said that they should “make a greater effort in tackling economic growth” in the context of an ageing population. He also averred that “we need to discuss the normal sequence of reforms” in the products market and in services and the labour market. Juncker underlined the fact that dialogue with the European Central Bank (EC) was “not working marvellously as we are still young” but explained that for months now the Frankfurt institution better understood the expectations of finance ministers.
Following discussions about interpretation of the inflation criteria on Monday and Tuesday, the president of Eurogroupe reaffirmed that, “it is not true to say that the Euro zone is an exclusive club”. In a choice between nominal criteria (of Maastricht) and real criteria, it is preferable that candidate members for the Euro stick to the former because if they were replaced by real criteria “the horizon would become more distant”. What ever scenario transpires, Juncker explained that “we should not believe that in the new or older Member States, accession can be negotiated”. He added that when a Member State fulfils the criteria, the adoption of the Euro can not be refused it. He said that the twelve countries should not adopt “a form or arrogance or condescension” with regard to Euro candidates.
Differentials in growth and inflation in the Euro zone are not risks in the very short term but should be taken into account. Following discussions last Monday (EUROPE), Juncker pointed out that they needed to talk about the impact on price formation and index linked wages, as well as services (health, leisure and transport) and real estate. He then observed that “when the Euro is going best, the debate becomes less ambitious about the external representation of the Euro zone”. He then deplored the fact that “some countries do not agree to their currencies disappearing”. Although the Belgian government has been hesitating till now, he said, and now appears to be ready to move, the Netherlands is still blocking. Mr Juncker has decided that the European Investment Bank (EIB) is “privileged instrument for external EU action” and also affirmed that divergences between Member States were currently less pronounced on the question of renewing the external mandate of the Bank and that the Council was on the point of coming to a conclusion. (ab)