Brussels, 4 May 2006
Eurogroup ministers will meet at 19:00 hrs on Thursday 4 May. Joaquín Almunia, Commissioner responsible for Economic and Monetary Affairs and European Central Bank Governor Jean-Claude Trichet will attend. A press conference is planned for after the meeting.
The meeting will start with a discussion on the relative growth performance among euro area Member States, a regular theme at Eurogroup meetings. In fact this will be the third time that growth differences are discussed.
The previous discussions have highlighted that a) euro area growth differences are not unusually large by historical standards or compared with other large economies, b) that they are becoming smaller, but c) that they are also increasingly driven by structural rather than cyclical factors (i.e. differences in competitiveness) and that d) the competitiveness mechanism works only very slowly.
Thursday’s discussion will look at specific cases with a view to generate policy conclusions.
Ministers will then have their regular discussion on recent economic developments, with a particular emphasis on the evolution of oil markets and prices.
Commissioner Almunia is also due to present briefly the main results of the April debt and deficit notifications for euro area Member States (see Eurostat press release STAT/06/48 of 24.4.2006).
The European Union's Council of Economy and Finance Ministers will start at 10.00 hrs on Friday 5 May. The European Commission will be represented by Economic and Monetary Affairs Commissioner Joaquín Almunia, Administrative affairs, Audit and Anti-fraud Vice President Siim Kallas, Financial Programming and Budget Commissioner Dalia Grybauskaité and Taxation and Customs Union Commissioner Lazlo Kovacs.. A press conference will take place after the meeting.
Joint ministerial dialogue with acceding and candidate countries (09:00)
Before the ECOFIN itself, EU ministers will hold a meeting with the finance ministers of acceding countries Bulgaria and Romania and candidate countries Croatia, Turkey and the Former Yugoslav Republic of Macedonia. The holding of such multilateral dialogue meetings with candidate countries was agreed upon by ECOFIN in 2000 and takes place since 2001.
The main subjects are typically related to the pre-accession fiscal surveillance and related macroeconomic or structural issues of candidate countries
Preparation of the European Council (15-16 June) (AT)
ECOFIN ministers are expected to agree a contribution to the European Council on the review of the EU Sustainable Development Strategy. The EU adopted a strategy in 2001 to maintain high levels of environmental protection while ensuring economic growth and social cohesion. In December 2005, the Commission presented a review of the strategy and called on all governments, businesses, NGOs and citizens to come up with new and better ways to move towards a more sustainable way of life and seize the opportunities available. (see IP/05/1582 and Memo/05/477). Under the strategy the European Council is to review progress and the validity of the objectives.
Preliminary draft budget 2007 - start of budgetary procedure (RS)
Dalia Grybauskaitė, Commissioner for Budget and Financial Programming, will present to the ECOFIN the Preliminary Draft Budget (PDB) for 2007, first under new Financial Framework 2007-13, as proposed by the Commission on the 3rd of May. This proposal, according to Mme Grybauskaitė “translates precisely the political goals of the EU, mainly stimulation of growth and employment, into concrete financial terms”.
EU spending on competitiveness and cohesion policies for growth and employment (new heading 1 of the Financial Framework) will increase by 14.3% compared to 2006. This increase is of strategic importance, because of the key programmes such as the Competitiveness and Innovation Programme (CIP; increase in funding by 53% compared to 2006), Trans-European Networks (TENs; +18%), the 7th Research Framework Programme (+3%) and Lifelong Learning (+30%), as well as a new generation of programmes under the Cohesion policy, in which countries that joined the EU in 2004 will fully participate for the first time in 2007.
The Commission PDB proposal for EU spending in 2007 amounts to EUR 126.8 billion in commitment appropriations. It is 4.6% increase compared to 2006. Payment appropriations increase as well – by 3.9% to EUR 116.4 billion. Commitment appropriations represent 1.08% of EU Gross National Income (GNI) and payments 0.99% GNI.
Commission Action Plan towards an Integrated Internal Control Framework (VR)
Vice-President Siim Kallas will present the Action Plan for an integrated internal control framework adopted in January by the Commission to the ECOFIN Council. Among the issues that the Commission will raise is the need for the institutions to arrive at a common understanding of tolerable risk in the underlying transactions.
Financial Services (OD)
Three important sets of Council conclusions in the area of financial services are on the agenda of next ECOFIN for formal adoption by the Council of Ministers:
There is broad support on each of them. “Financial services” is more and more recognised as one of the pioneer, flagship areas for Europe's future growth and jobs. As the European financial industry still has strong untapped economic and employment growth potential, there is broad consensus that Europe must deliver that potential – and set itself the ambition to construct the best financial services regulatory framework in the world.
The Commission's White Paper on Financial Services Policy (2005-2010) was published on 5 December 2005 and includes the other two priority areas. A preliminary discussion on the White Paper took place in the ECOFIN Council of 6 December 2006. The new strategy closely parallels the Commission's earlier consultative Green Paper, published on 3 May 2005, which was strongly supported by the ECOFIN Council in its conclusions on 11 October 2005 and received broad support from all stakeholders. The two year open consultation process leading to this strategy, in which all stakeholders have been heard, has lead to broad consensus. The Commission's program of dynamic consolidation has been recognised as a very ambitious task which will need enormous effort and resources from all concerned.
Financial integration at least is an area on the move. However, the job is not finished. The consolidation process must lead to capturing wide benefits for consumers and businesses alike. There is a clear need to further strengthen supervisory and enforcement mechanisms and to create the conditions to facilitate cross-border consolidation via mergers, acquisitions and market entry in the. Current fragmentation of financial markets and the relative lack of cross-border consolidation in the EU financial sector hampers competition in a sector which is crucial for the performance of the EU economy.
The Austrian Presidency will present the progress today and will suggest a timetable for future work on the different proposals that have been submitted by the Commission to the Council (since 2004) and which are part of the VAT package. This package is composed by interlocking elements in the context of establishing clear cut rules for determining the place of taxation and minimizing regulatory burdens on business engaged in cross border trade.
It is important not only that the Council has to reach an agreement on the timetable on the adoption of the different proposals, but also to reach an agreement to the package as a whole. At this stage the Austrian Presidency wants an orientation debate on any fundamental political reservations against the package of measures and the timetable proposed by the Presidency with a view of a political agreement at the June ECOFIN.
The package is composed by: