Brussels, 27/06/2007 (Agence Europe) - With only a few days to go before it draws to an end, the time has come to look back over the German EU Presidency, an exercise that ministers are very willing to take up this week before the European Parliament. When it comes to economic and financial matters, Peer Steinbrück said he was pleased with the budgetary adjustment efforts made over the last six months, but was less enthusiastic about the progress made in taxation matters, for example. Initiatives on this will in fact be prolonged under the Portuguese and Slovenian presidencies.
The upward growth predictions could continue into 2008 and beyond, which means “there is optimism in the air”, said the German finance minister. There is also the feeling of a “powerful internal economy”, bearing witness to the confidence of economic operators, and heightened by good employment figures. Under such conditions, there is a need to continue with this effort to consolidate public finance as “we have never had such potential for moving forward” and for reducing deficits, said Mr Steinbrück.
Reaffirming the commitment made by Eurogroup ministers in Berlin in April to use the favourable economic situation to best advantage in order to consolidate public finance and reach medium-term objectives by 2010 at the latest, Mr Steinbrück felt it was “interesting”' that French President Nicolas Sarkozy's should come to the next Ecofin Council on 10 July. “I don't want to preach out and out savings” as a double strategy is needed, mixing not only consolidation of public finance but also stimulation of investment for the future, Mr Steinbrück said, taking the view that quality is just as important as the structure of public finance.
At the economic and monetary level, the success of the euro was confirmed with Slovenia's, and soon Cyprus and Malta's, entry into the single currency area, the minister was also pleased to state. He stressed the “open nature of the eurozone” which is ready to take in all those who meet the Treaty's convergence criteria.
“We have made considerable progress” in the field of financial markets; he then said, citing among other things the directive on payment services, where there has been collaboration with the EP, but added: “I have not been as successful as I would have liked on taxation matters”. Opinions are still divided over harmonising the corporate tax base and, he deplored, the interest on this is “less than tepid”.
The debate on hedge funds could not be conclusive and expectations were often “a little excessive”. Nonetheless, it is important at this stage to appeal to those providing funds so that they take a good look at the credibility of their partners and collaborate with these alternative funds in favour of a voluntary code of conduct, Mr Steinbrück recalled. Investment funds “are useful but we cannot close our eyes to the risks for financial stability, which are due to the enormous volumes involved and the lack of transparency for some of them”, he said. He went on: “We cannot use the stick but rather the carrot”. Although Alexander Radwan (EPP-ED, Germany) is hoping for a Green Paper on the issue, “there is some confusion at the Commission”, Mr Steinbrück said, subtly stressing that he could not complain of the line taken on hedge funds by the “Commission generally present at the Ecofin Council” (Joaquin Almunia), before saying he felt there was a change in the position taken by Charlie McCreevy, when the latter speaks of code of conduct. He went on to welcome the announcement made last week by 13 European hedge funds regarding the creation of a working group to reflect upon how to make the most of assets and risk control.
The minister lodged a challenge against the allegations of the British daily, The Financial Times, which came out on Tuesday, which stated that Berlin intended to create an agency likely to oppose acquisition by a f oreign f und under state control, if this operation posed a risk for national security. “No one in Germany thinks of this agency”, no one has used this term, Mr Steinbrück then reassured MEPs who had voiced concern about the press announcement that there could be foreign investment control on German soil, and about the impact that such an approach could have on the single market. He acknowledged that the hypothesis of such a threat deserved to be looked at, but that the consequences drawn by the press were “inappropriate”. Thus, he said, “it would not be an agency that would control foreign financing flows but it is important to discuss at political level” what is happening in the sovereign funds field. (ab)