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MEMO/08/558

Brussels, 11 September 2008

Preparation of Eurogroup and Informal Economic and Finance Ministers Council, Nice (France) 12 and 13 September 2008 (Amelia Torres, Oliver Drewes, Maria Assimakopoulou, Ferran Tarradellas)

EUROGROUP (AT)

Eurogroup ministers will meet at 9:00 hrs on Friday 12 September. Joaquín Almunia, Commissioner responsible for Economic and Monetary Affairs will attend as will European Central Bank Governor Jean-Claude Trichet. A press conference is scheduled to take place after the meeting.
Ministers will discuss the economic situation, including financial market developments and oil prices, and policy responses, a point that will be continued the followed day at the Ecofin. Commissioner Almunia will present the updated forecasts published this week that will serve as a basis for the discussion. For the forecasts see
IP/08/1305 and full document on: http://ec.europa.eu/economy_finance/thematic_articles/article12054_en.htm)

A compilation of the latest euro area indicators can also be found on: http://ec.europa.eu/economy_finance/db_indicators/db_indicators9237_en.

Ministers will also review the state of practical preparations for the introduction of the euro in Slovakia. On 18 July, the Commission said Slovakia was on track, but identified areas where further work was necessary. The Slovak authorities have started to implement some of the recommendations contained in the report (see IP/08/1183 and report on the practical preparations for the introduction of the euro in Slovakia on http://ec.europa.eu/economy_finance/thematic_articles/article12963_en.htm). They have, for instance, reinforced the central coordination of the changeover, increased the staff at the trade inspection body (?) and stepped up the security measures for the escort of the trucks transporting euro cash.

Further efforts remain nevertheless needed with a view to, among other things, increasing the frontloading (to banks) and sub-frontloading (to retailers) of euro cash. The banks should in particular be encouraged to use the recently adopted simplified ECB guideline on sub-frontloading, which makes the operation much easier and therefore more attractive for shops and small companies. The communication campaign on the euro changeover should also be intensified. The efforts to promote the fair pricing code should be continued, with a view to increasing significantly the number of subscribers. )

Ministers also planned to continue their discussion on the suggestions contained in the Commission's EMU@10 report ("EMU@10: successes and challenges after 10 years of Economic and Monetary Union) with a view to reaching conclusions at Ecofin next month to submit to the European Council. The report argues that to improve the functionning of Economic and Monetary Union, Member States must better coordinate their economic policies and broaden surveillance aspects beyond budgetary issues to cover divergences in inflation, current accounts and competitiveness. For more info see IP/08/716 and report on http://ec.europa.eu/economy_finance/publications/publication12682_en.pdf) .

ECOFIN COUNCIL

The Informal Council of Economics and Finance Ministers will start around 13:00 hrs with a working lunch on Friday 12 September. The afternoon session will start at 14:45 hrs. and should run to 18:30 hrs. The meeting will continue the following morning, Saturday 13 September from 8:30 hrs to 12:30 hrs. The European Commission will be represented by Commissioner Joaquín Almunia, Internal Market Commissioner Charlie McCreevy and Taxation and Customs union Commission Laszlo Kovacs. A press conference is expected to take place at the end of the meeting.

Implementation of the roadmap on financial turmoil (AT-OD)

The afternoon session of Friday is expected to be entirely devoted to assessing the recent evolution in the financial markets and progress in implementing the road map on the financial turmoil adopted by the ECOFIN in October 2007. The overall aim is to reinforce financial stability. A particular focus will be on the likely interaction between the financial sector and the real economy, in light of the slowdown in economic growth. I Implementation of the roadmap is on track, with substantial progress achieved on all of the main elements. There will be an exchange of views on how to implement the various agreed steps, including their timetable.

Supervision in Europe (OD)

Still in the afternoon of Friday, ministers and central bank governors will take stock of the ongoing work on supervision in Europe and notably on how to strengthen and adapt current arrangements to the integration of financial groups that now operate across the entire continent. Representatives of the European financial industry have been invited to come and share their views with Ministers and central bank governors. Ministers and central bank governors will also review the progress made in terms of convergence of supervisory practices within the Lamfalussy process.

Reduced VAT rates (MA)

On Saturday morning, the Ministers are expected to start with a discussion on the use and effectiveness of lower rates of VAT in order to promote specific policy purposes. The Presidency intends to reach some guidelines on the usefulness of reduced rates for achieving sector policy objectives, which will feed into the Commission's preparatory work on any future legislative proposals on VAT reduced rates.

Analysis of the economic situation (AT-FT)

The Saturday session will be mostly devoted to the discussion of the economic situation, including analysis of the oil market, and concerted policy responses to the sharp slowdown.


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