beginning of the end of the EU stability pact?
OUTLOOK EU finance ministers seek deal on stability pact reforms
Monday, March 7, 2005 11:51:17 AM
forexstreet.com
BRUSSELS (AFX) - EU finance ministers are aiming to reach a deal on reforms to the stability and growth pact when they gather this evening and tomorrow, sources said
The ministers' objective is to agree on the broad outlines of the reforms for their leaders to rubberstamp at their summit on March 22 and 23
The EU's Luxembourg presidency last night circulated among member states a draft of the reforms to Europe's fiscal rulebook ahead of tonight's meeting of euro zone ministers
"The presidency's intention is to come as close as possible to an agreement," a Luxembourg diplomat told reporters
Another diplomat said: "The presidency has made an effort to have a solution that will lead to a consensus." He said that while progress towards a deal has been "on a lot of points ... the question is to know whether this progress is enough to lead to a compromise"
The diplomat added that "several open points" remain on the proposed reforms. The European Commission is optimistic a deal will be reached at the meetings, spokeswoman Amelia Torres said
Both EU economic and monetary affairs commissioner Joaquin Almunia and commission president Jose Manuel Barroso will attend the talks. France and Germany, which have repeatedly breached the pact's deficit limit of 3 pct of GDP, are spearheading efforts to soften it, arguing that this would help kickstart growth
Another EU official said Germany is trying to persuade other member states to agree to have its unification costs exempted from the EU's deficit calculations
"The Germans want special treatment for their special circumstances," he said. "But even the Germans agree that we can't put one item into the reforms that only concerns one country," he said
The official said France and Italy too want certain spending items excluded from the deficit calculations
But Luxembourg finance minister Jean-Claude Juncker, who is also prime minister, has ruled out such proposals at the ministers' previous meetings
The reforms, which will retain the 3 pct deficit limit, are expected nonetheless to give more leeway to countries bearing the cost of such structural reforms as pension system overhauls and to those experiencing negative growth
They will also oblige countries to cut their deficits during times of economic growth and put more pressure on them to reduce debt |
