European Council Meetings.

Dáil Éireann Debate, Thursday - 6 May 2004

Thursday, 6 May 2004

Questions (19, 20, 21)

Dan Boyle

Question:

15 Mr. Boyle asked the Minister for Finance the areas of agreement reached between the ECOFIN Ministers meeting at Punchestown, County Kildare. [12955/04]

Tom Hayes

Question:

46 Mr. Hayes asked the Minister for Finance the agenda items which will be discussed at the ECOFIN meeting planned for Ireland. [12867/04]

Thomas P. Broughan

Question:

50 Mr. Broughan asked the Minister for Finance the outcome of the recent informal meeting of EU Finance and Economics Ministers held in Punchestown; and if he will make a statement on the matter. [12969/04]

Written answers

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 15, 46 and 50 together.

The Council of Economics and Finance Ministers of the EU, widely known as ECOFIN, held an informal meeting on 3 April last in Punchestown, County Kildare. I chaired the meeting as part of the Irish Presidency of the EU.

The Ministers from the 25 member states of the enlarged EU were joined at the meeting by the Central Bank Governors from those states. The participants also included President Prodi of the Commission and Commissioners Solbes, Bolkestein and Schreyer, President Trichet of the European Central Bank and President Maystadt of the European Investment Bank.

The agenda for the meeting focused on: the future provisions for the EU budget for the post-2006 period, known as the financial perspective 2007-13; the EU's general economic situation and economic policy stance; IMF-World Bank spring meetings in Washington and; the current state of financial markets and further promotion of the financial services action plan to establish a single market in financial services in the EU.

As is the case with all informal meetings of the Council, no formal decisions were taken at Punchestown. The progress made on each issue was as follows. With regard to future EU financing in the period 2007-13, the meeting saw a very comprehensive debate on a range of topics. President Prodi and Commissioner Schreyer provided ECOFIN with additional insights into the Commission's recent Communication on the future direction of the Union and its ideas on funding requirements. There was a wide range of views expressed on the Commission's communication which envisages a substantial increase in the size of the EU budget. Some member states believe that the growth of the Union's budgetary spending should not exceed the growth of the Union's economy. Others could support a more rapid increase in the budget.

The Commission reiterated its view that the increase in spending which it envisages is essential if the Union is to meet its existing commitments, including the requirements arising from enlargement, and maintain the impetus of the overall political project. The meeting provided a valuable opportunity for a first full exchange of views between Council Members and for the Commission to explain the basis for its approach in advance of its tabling of its formal legislative proposals in this area in July.

Ministers and governors then discussed the current economic situation in the EU. They agreed that the economies of Europe, which have been recovering tentatively up to now, should gather momentum over the course of 2004, helped by the global upturn and by the expected strengthening in domestic demand. Ministers and governors also discussed the longer term strategies that will boost Europe's capacity to grow. These priorities for structural reform will be at the heart of EU economic policy-making into the future. There was a full discussion about the EU Presidency speech to be used at the IMF-World Bank spring meetings in Washington.

Ministers and governors also discussed financial market conditions and the progress made in relation to the integration of financial services in the EU. They noted that the financial services action plan, FSAP, which aims to promote financial markets integration in the EU, had significantly enhanced the regulatory and supervisory framework for the European financial markets. This topic will be revisited by ECOFIN next month when it considers the broad outlines for a strategy for the further integration of Europe's financial markets in the wake of the current FSAP.

Commissioner Bolkestein briefed Ministers and governors on the state of play on negotiations on the two outstanding international accounting standards, IAS 32 and 39. Ministers acknowledged the importance of the project for convergence of accounting standards and asked for a further update on developments to be given to them at a future meeting. Ministers also discussed the post of managing director of the International Monetary Fund, to which Mr. Rodrigo Rato, the former Spanish Finance Minister, has since been nominated. Overall, the Council had a very productive meeting that made substantial progress on the important issues on its agenda.