Date of release : 17-02-2005

Policy area : Economic and Financial Affairs Economic and Financial Affairs

Event : Economic and Financial Affairs Council

The Prime Minister, Minister for Finance and current President of the Economic and Financial Affairs Council presided over the meetings of the Eurogroup and of the Economic and Financial Affairs Council held in Brussels on 16 and 17 February 2005.

The Luxembourg Government was represented by Jeannot Krecké, Minister for the Economy and Foreign Trade.

The Ministers for Finance and the Economy essentially focused on the review of the Stability and Growth Pact and discussed all the elements of the pact. The Presidency will pursue the review of the pact in the search for a global solution, which should be finalised in March and presented to the European Council of 22 and 23 Marsh 2005.

In a statement to the press after the meeting, President Jean-Claude Juncker said he was optimistic about the possibility of reaching an agreement in March, and especially about the fact that “the points of view have narrowed considerably" and should allow the Presidency to present a compromise at the next Eurogroup and Economic and Financial Affairs Council meetings of 7 and 8 March 2005. 

Prime Minister Juncker also stated that questioning the right of initiative of the European Commission in the application of the Stability and Growth Pact will not be an issue. “It should be clear", said Jean-Claude Juncker, "that it will not be left to the discretion of a Member State as to whether the excessive deficit procedure will be implemented. This is reserved to the Commission, which will report to the Council and which will draw appropriate conclusions." 

Mr Juncker also reported that the Eurogroup and the Council agreed to strengthen the preventive framework of the pact, which obligates Member States to allocate possible budget surpluses to the reduction of the deficit and of public debt so that there will be more latitude during periods of low economic growth. 

The Council adopted the conclusions on the implementation of the main economic policy guidelines. The Ministers issued guidelines on the principal points of economic policy. The discussion focused on the document presented by the Presidency on the major features that will be included in the "Key Issues Paper" of the Economic and Financial Affairs Council. The Council issued mandates to the relevant Committees for the purpose of preparing texts to be adopted by the Council of 8 March, which will be submitted for the attention of the European Council of 22 and 23 March, on both the major aspects of policies to be followed by the Member States and on the coordination procedures to be followed in the context of the Lisbon Process. 

The Council discussed the communication of the President of the European Commission on the Lisbon Process, which focussed primarily on the procedural aspects that will frame future efforts in pursuing the key objectives regarding structural reform. 

The current President underlined that the basic balance of the Lisbon Strategy between the economic, social and environmental frameworks should be maintained and “that there is no intention of disturbing this balance."

The Council adopted a decision based on Article 104(9) regarding Greece. This decision includes an extension of the deadline for correcting excessive debt, which should be achieved no later than 2006. He welcomed the initiative of the Greek authorities in submitting as quickly as possible, and no later than 21 March 2005, an update on their stability programme. This should emphasise fiscal measures foreseen to reduce the deficit to less than 3%, as well as a trajectory of consolidation towards a balanced budgetary position beyond the medium term. 

The Council easily adopted its advice on the stability or convergence programmes of the second series of countries. The stability programmes of Belgium, France, Germany, Ireland and Italy and the convergence programmes of Denmark, Estonia, Malta, Poland and Slovakia were discussed. The respective texts were made public and will be placed on the Council’s website (http://ue.eu.int/).

The Council noted the Communication of the Commission and of its intention to present in the near future its legislative proposals for realising the necessary improvements in the area of budgetary statistics. 

The current President Juncker informed the Council of the organisation of the work on the financial perspectives for 2007 to 2013 and on the work carried out since the beginning of the year, as well as on the way the Luxembourg Presidency intends to continue the work. The Council will reconvene at its next meeting, on 8 March, and will present the contents of the “framework for negotiations".

During breakfast, the Ministers were informed by the Commission and the European Investment Bank on the state of the situation in the regions of South Asia affected by the tsunami and of the needs and possibilities for financing in the region, above all in the area of reconstruction.