Brussels, 05/10/2007 (Agence Europe) - The EU Finance Ministers will meet on Tuesday 9 October in Luxembourg for an Ecofin Council largely devoted to subjects already debated at the informal Council in Porto (EUROPE 9503). In particular, they will return to the initiatives taken in the area of clearing and settlement and strengthening the provisions in place for managing cross-border financial crises (for the conclusions in this area, see following item). Against the backdrop of the turbulence which shook the financial markets over the summer, the ministers will look at progress on the economic situation an financial stability (for the Commission's and the European Central Bank's assessments, see EUROPE 9516). They will also adopt a range of conclusions and also make a statement on the excessive deficits in the UK and Czech Republic.
The meeting of the Eurogroup, which will be held late on Monday 8 October, will be used to prepare for the G7 meeting in Washington. The ministers from the euro zone will decide on the position which the President Jean-Claude Juncker will defend in the margins of the assemblies of the Monetary Fund and the World Bank, which will take place from 20 October. They will be looking in particular to make their voices heard on the current exchange rate, which is of increasing concern to European business (EUROPE 9515). They will therefore seek to agree on demanding, more or less openly, that the USA sticks by its own declarations and works to strengthen the dollar.
An appeal for greater flexibility in the Chinese exchange rate and for the Japanese yen to reflect accurately the country's economy should also be on the agenda. The thirteen euro ministers will also examine the state of public finances in the Member States, in relation to the draft budgets for next year tabled in several countries. Having reiterated their expectations for sound public finances in France (EUROPE 9502) in Porto, they will in particular take note of the French plans for 2008 (EUROPE n° 9510).
On Tuesday at breakfast the twenty-seven ministers will examine the orientations which the IMF is due to present on its future reform, which could involve certain sacrifices from the European side. They will then adopt conclusions on the quality of public finances and the effectiveness of the preventive arm of the Stability and Growth Pact (SGP), in view of which the Commission made proposals in its latest report on public finances, published in June (EUROPE 9445).
The Council should also follow the Commission's proposals by partially repealing the excessive deficit procedure initiated in 2005 against the UK and confirming the deadline of 2008 for the correction of the deficit in the Czech Republic (EUROPE 9500). Conclusions on the “better governance” and “flexicurity” initiatives (see other news item) are also planned.
On the subject of the economic situation and financial stability in the EU, the ministers will notably adopt a specific roadmap for European and national provisions on financial stability. In Porto they adopted a declaration in which they reaffirmed their confidence in the European economy's capacity to resist financial turbulence and deemed the regulatory framework in place at European level appropriate (EUROPE 9501 and 9503). They nevertheless asked the Economic and Financial Committee (EFC) to look into the possibilities for improving the transparency of complex financial instruments and the role of financial rating agencies. Mr Teixeira dos Santos, the President in office of the Ecofin Council, had hoped that the preliminary results would be ready for October. He will then report to the President of the European Council with a view to possible discussion at the level of heads of state and government at the informal Summit on 18 and 19 October.
Finally, the Ecofin Council will hold an exchange of views on the funding of Galileo in light of the recent Commission communication (EUROPE 9505) and the discussions in the Transport Council on Tuesday 2 October (EUROPE 9514). This discussion, the second to be held among the finance ministers (EUROPE 9466), is unlikely to produce any substantial results, the Portuguese Presidency thinks, as the Member States' positions as yet differ too widely. (ab/hb)