-The EU Ministers for Economic and Financial Affairs have reached an agreement maintaining the objective of achieving virtual budgetary balance in 2004.
ECOFIN President Rodrigo Rato announced the agreement of the 15, 'with establishment of the objective of near balance in 2004 for all countries, except those already in that situation or in surplus.'
Mr Rato gave details of the ECOFIN approved text, in which 'the new French Government has accepted the economic policy guidelines with the following points:
the French Government guarantees compliance with the Stability Pact, with the deficit in any event being brought below 3% in 2002, and to that end
the French Government will exercise very strict control of its budgetary trends and ensure that any lowering of taxes is accompanied by a reduction in expenditure;
with respect to 2003 the French Government will establish a policy for producing a deficit reduction sufficient to lead to a situation of near balance in 2004;
the French Government will also implement without any delay a broad policy of structural reform designed to increase growth potential and reduce the level of public expenditure in the medium term, and in particular, put together without any delay a full reform of the pensions system, leaving a margin for its sustainability in the context of an ageing population.'
The German Finance Minister, Hans Eichel, has expressed satisfaction at the results of the meeting, and especially at France’s commitment to achieve a budget near balance by 2004. Eichel said France's commitments were similar to his own country's.
He said the German goal was more far-reaching, based as it was on higher economic growth of 2.5 and not 3%. The Minister played down the importance of the fact that Paris’ commitment is conditional on growth being 3% between 2003 and 2004. “That applies to everyone. There is no economic or financial projection which is not related to economic growth forecasts. Therefore, it is an ambitious but attainable objective,” Mr Eichel said.
Pedro Solbes, European Commissioner for Economic and Monetary Affairs, said he was satisfied with the agreement 'in accordance with the commitments made at the Barcelona Council,' and noted the importance of 'getting those commitments under way and seeing how far they are being met.'
The ECOFIN also examined the situation regarding taxation and energy, though its President said that “the High-Level Group will not be able, in time for the Danish Presidency, to close the mandate of the end of 2002 for achieving the objective of introducing the Directive on the fiscal harmonisation of energy.”
Mr Rato also announced that “the ECOFIN has made progress on establishing an autumn date for launching the Euro-Mediterranean facility with the financing proposed by the Commission of 250 million euros for the period 2003-2006, and with a particular focus on risk capital and technical assistance to the private sector in the southern Mediterranean, and which concludes the agreements of the Barcelona Council.”
ECOFIN press release
Council Recommendation of 21 June 2002 on the Broad Economic Policy Guidelines of the Member States and the Community
© Council of the European Union
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