Brussels, 11 February 2008
Eurogroup ministers will meet at 17:00 hrs on Monday 11 February. President José Manuel Barroso and Joaquín Almunia, Commissioner responsible for Economic and Monetary Affairs will attend as will European Central Bank Governor Jean-Claude Trichet. A press conference is expected to take place after the meeting.
Ministers will discuss the evolution of the economic situation and outlook since they last met in January (For a snapshot of the latest euro area indicators see:
They also will be informed about the G-7 Finance Ministers meeting last week in Tokyo.
Ministers will then discuss the Commission’s recent recommendations for Council opinions on the updated stability programmes of euro zone members Germany, France, Italy, Luxembourg, the Netherlands and Finland (for details on the Commission’s assessments see IP/08/75 (Germany, the Netherlands, Luxembourg and Finland), IP/08/106 (France, Italy) ahead of their formal consideration by the ECOFIN Council the following day.
Against the background of the marked increase in euro area inflation from rates of around 1.8-1.9 percent in the first half of 2007 to an estimated 3.2 percent in January 2008, the Eurogroup will also discuss the sources of this increase, and available policy measures to contain inflationary pressures and to avoid second-round effects. Oil prices increased by over 40 percent, in euro terms, between November 2006 and November 2007 and have remained on high levels since then. Agricultural food prices have also risen sharply: in particular for wheat, dairy products and poultry. As a result, higher prices for energy and food contributed almost 1 percentage point each to euro area headline HICP inflation of 3.1 percent in December. A key area for action is to enhance the competition and integration of the European product and services market. Moreover, it is important that wage developments are in line with productivity. Moreover, national decisions on administrative prices and indirect taxes should take into account their inflationary impact.
The Council of Economics and Finance Ministers will start at 10.00 hrs on Tuesday 13 February. The European Commission will be represented by Economic and Monetary Affairs Commissioner Joaquín Almunia and by Vice President for Administrative Affairs, Audit and Anti-Fraude Siim Kallas. A press conference is expected to take place after the meeting.
Over breakfast, Ministers will discuss the economic situation and outlook since they last met on 21 January. The relative growth outlook for Europe will be reassessed in the next Commission Interim Forecast (21 February), which will update the outlook for growth and inflation, for the largest economies, the EU and the euro area. For the latest comments on the economy by Commissioner Almunia see Speech 08/66.
Implementation of the Stability and Growth Pact (AT)
The Council is expected to give its opinion on the updated stability/convergence programmes on the basis of recommendations put forward by the Commission on 23 January for Germany, Luxembourg, Hungary, the Netherlands, Sweden, Finland and the United Kingdom (see IP/08/75 and IP/08/76) and on 30 January for France, Italy, Romania and Slovakia (see IP/08/106 and IP/08/107)
The next group of programmes will be examined by the Commission on 13 February and is expected to concern Malta, Austria, Bulgaria, Cyprus, the Czech Republic, Slovenia, Portugal, Latvia and Estonia.
Preparation of the European Council (13-14 March)
The Lisbon Strategy for Growth and Jobs is the backbone of Europe's efforts to address the challenges of ageing and globalisation. The Strategy has ended its first three-year cycle and at the Spring European Council in March 2008, agreement is needed on reform priorities for the next cycle. The key issue is the need for a proposal for the revision of the Integrated Guidelines, often also known as the Broad Economic Policy Guidelines. These are an instrument at the heart of the Lisbon Strategy aiming to foster coherent, consistent Member State and Community reform measures; as the Guidelines expired at the end of 2007, a proposal is obligatory. The Commission set out its position on the revision of the Integrated Guidelines in its Strategic Report, a communication on Lisbon adopted on 11 December 2007. In the Commission's view, "There is broad consensus among Member States and stakeholders that the guidelines should not be changed and that the focus should be kept on implementation".
This year, the European Parliament's ECON Committee has prepared a draft motion for resolution on the Commission's Strategic Report. Furthermore, according to Article 128(2) of the Treaty, the European Parliament must be formally consulted in 2008 on the Employment Guidelines part of the overall package of Integrated Guidelines. In contrast to the Commission's view, the ECON Committee's draft resolution includes proposed amendments to the Commission's proposal for the Integrated Guidelines for the next cycle. For these reasons, it is important for dialogue between the Parliament and the Commission to resolve these differences and ensure the fullest mutual understanding.
Following the orientation debate on 22 January and subsequent discussions in the EPC and EFC Committees, the ECOFIN Council will adopt the Key Issues Paper (KIP) of the Slovenian Presidency. The KIP will be a major input of the ECOFIN to the Spring European Council next March and will provide the broad strategic outlines for ECOFIN work over the next year. Against the uncertain macro-economic background, the KIP highlights the importance of implementing structural reforms in the Member States, welcomes the Commission's Strategic Report, stresses ECOFIN's commitment to ensuring full implementation of the Stability and Growth Pact, devotes significant attention to the efficiency and stability of the EU financial system, and acknowledges the key role played to European integration by EMU.
The Ecofin Council’s discussion of energy and climate change takes place against the background of the Commission’s recent package of proposals that aim to give legal underpinning to the European Union’s ambitious 2020 targets for greenhouse gas reductions and increasing the share of renewable energies. They are Ecofin’s contribution to the upcoming European Council discussions on the Commission’s proposals. A key element of these proposals was to simplify and improve the working of the EU emissions trading scheme by introducing a single EU-wide emissions cap and auctioning a greater share of allowances, and to expand its coverage to additional sectors and greenhouse gases other than carbon dioxide.
Auctioning allowances rather than giving them away free will raise sizeable revenues for national budgets. The Council conclusions stress that it is for Member States to decide how these are to be used, but recommends that they should not be used in ways that are inconsistent with EU efforts to tackle climate change. In its proposal the Commission has suggested that at least part of the revenues should be used to support the EU’s energy and climate policy goals.
In March 2005 the Commission adopted a better regulation package designed to cut-red tape, tackle excessive regulation and to strike the right balance between the costs and benefits of legislation. Three years hard work is paying off and cutting red tape has now reached cruising speed in the EU and is delivering the first tangible benefits to citizens and enterprises. The second progress report on the strategy for simplifying the regulatory environment which was published on 30 January, lists a series of impressive results already delivered and a set of ambitious further measures to be presented by the Commission in the course of 2008. Examples of simplification proposals already adopted include the "Single Payments Area" in the EU which could save the EU economy up to €28 billion per year and the new electronic Customs Code which will boost international trade and save businesses up to €2,5 billion/year.
The Commission also reported on the first year of operation of the Action Programme for reducing administrative burdens. €500 million is the estimated savings for companies by cutting red tape imposed on business resulting from the adoption of five fast track actions in 2007 with a further 800 million Euro savings expected to follow shortly. The Commission also announced its intention to come forward later this year with a further wave of fast track proposals in areas such as easing information requirements in the transport, agriculture and maritime sectors.
General budget of the European Union (VR)
ECOFIN will adopt a recommendation on granting discharge to the Commission for the 2006 EU budget. This recommendation will subsequently be presented to the European Parliament's budgetary control committee, meeting on 25 February 2008. The European Parliament will decide and vote on this issue during its plenary session of April 2008 in Strasbourg. Siim Kallas, the European Commission's vice-president responsible for the annual budget discharge, has said that the 2006 budget is the best ever in terms of evaluation from the European Court of Auditors. The Court has given a favourable opinion on the accounts. As to the payment transactions, the Court now gives its green light to more than 42%, compared to only 6% three years ago. The Commission continues to cooperate with Member States, which are responsible for spending some 80% of EU funds, to further improve the record and to help the Commission towards its strategic objective of obtaining positive assurance from the Court of Auditors on the whole of the budget.