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The Ministries of Finance of the European Union arrived at a political agreement on the reform of the Stability and Growth Pact in Brussels on Sunday 20 March 2005. Meeting first as 12 within the Eurogroup, and afterwards as 25 within the enlarged Eurogroup, Finance Ministers spent 12 hours discussing the compromise proposals put forward by the Luxembourg Presidency.
Under the Presidency of the Prime Minister, the President of the Eurogroup, Jean-Claude Juncker, participants finally reached agreement on the text to be submitted to the European Council on 22 and 23 March 2005.
For Jean-Claude Juncker, this agreement does not change "the fundamental rules of the Economic and Monetary Union" and does not call into question "the 3% and 60% criteria". The agreement also fulfils the declared ambition of the Presidency to strengthen "the preventative arm of the pact" and to ensure that its application is "more economical" in the future and spread out over the entire duration of the economic cycle, thus enabling a "clearer overview of the situation".
"The word stability will not be excluded from our vocabulary or our practice and the powers and right of initiative of the European Commission have been safeguarded in their entirety", continued Jean-Claude Juncker.
In terms of governance of the Pact, President Juncker spoke of a "substantial improvement", in particular with regard to "the sharing of national responsibilities and Community responsibilities".
Jean-Claude Juncker said that he was particularly gratified that Ministers had been able to solve "the very difficult problem of the consideration of structural reforms" in application of the Pact and, more particularly, pension scheme reforms.
The Eurogroup and the enlarged Eurogroup have also succeeded in developing a system allowing for consideration of "other relevant factors" in support of a slight temporary overspend against the reference value of the 3% deficit. Rather than referring to an exhaustive list of relevant factors, the agreement sets out "chapter headings, that is general and basic principles enabling Member States and institutions of the European Union to reach a better understanding of the treatment of the relevant factors".
Finally, Jean-Claude Juncker said that he was starting from the assumption "that there will no longer be a drawn-out debate within the European Council on the reform of the Pact" and that discussions will be limited to an examination of the Ecofin Council report on the reform of the Stability and Growth Pact.
At the end of the Sunday evening meeting, the French Minister for the Economy, Finance and Industry, Thierry Breton, congratulated President Juncker on his "masterly management" of the discussions, which made it possible to reach this "historic agreement", to which the Ministers attending responded with sustained applause for the success of the Luxembourg Presidency of the Council of the European Union.
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