Brussels, 22/11/2006 (Agence Europe) - On Wednesday Jean-Claude Juncker sketched out the outline of his new mandate when he returned to face the EP's economic and monetary affairs committee, following his re-election as head of Eurogroup. The way ahead will largely correspond to that of his first mandate but progress in terms of rationalisation should now enable ministers to not have to devote all their time to concentrating on respect for the 3% rule, and encourage them to reach the real objectives of the Stability and Growth Pact, namely the medium term balance objectives. The Luxembourg prime minister and minister for finance said that although “the turnaround is widening and becoming more solid”…it's impossible to be pleased with an unemployment rate of 8%”. He is seeking more pro-active policies for this area.
Having noticed that the “rate of inflation is approaching a rate compatible with price stability as defined by the ECB”, Junker highlighted the importance of taking all the contributory factors fully into account. He explained that although oil prices were sill a risk in the future, “we are noticing more calm but we should not dare imagine that this calm will last”. In an address to those in charge of economic and monetary policies, Juncker pointed out that they should not close their eyes to the recent fall in prices and the influence that this would have. In an effort to strengthen EMU policy the minister repeated that “we have to have ambitions in tune with our means” because it was certainly the former that they were lacking. He also pointed out that “it is not my intention to change anything at all in the role set out in the treaties on the ECB” but indicated that they could do better than before. There are other risks to the economy, particularly the persistent global imbalances which suggest the frightening scenario of a brutal or messy landing. Mr Juncker averred that for the future they would be counting on more vigorous debate at Eurogroup on macro-structural subjects (global imbalances, Lisbon Agenda etc) to better understand the implications for economic adjustment mechanisms in the Economic and Monetary Union.
Lengthy exchanges of views on growth and inflation differences in countries of the Euro zone demonstrated that at this stage there were no worrying incoherencies. Juncker said that although these do not yet pose a problem, he thought that there was a “potential danger to the Euro zone”. Another concern of long date on how to coordinate the sequence of reforms in Euro zone Member States fizzled out at the last Eurogroup meeting (EUROPE 9301). The Eurogroup president added, sarcastically, that the correct sequence between structural reforms is a major subject “but every time I mention some major subjects they have a tendency to cease being a major subject”. He said that they thought that it was wise for Euro zone countries in a comparable situation to begin the same structural reforms at the same time, with the same ends. The debate, however, he confirmed, went against this idea. At the meeting on 27 November, Mr Juncker will attempt to intensify budgetary discussions between finance ministers on the time Euro zone countries should have for reaching their medium term objectives. On the question of external representation, he confirmed that he intended to plead for the “abandonment of this siege mentality” which at a level of communications, was a bad thing. Outside of the strict Eurogroup mandate and in an explanation to Ieke van den Burg (PES, Netherlands), who was asking him about the EU's employment goals, he explained that he would also continue to appeal for the implementation of the chapter on minimum social rights. He asserted that this was “not social romanticism, it's the economy” and the good use they made of it. Mr Junker affirmed that he was not making any allusion to social security but was aiming more particularly at the labour market, notably rules on redundancies, a-typical work contracts and the principle of the minimum wage. (ab)