[autom.vertaling] Voorbereiding van Eurogroup en de Informele Raad van Economie en Ministers van Financiën, Stresa 12-dertiende September 2003 (en)

The Eurogroup is due to meet at 4pm on Friday 12^th September in Stresa, Italy, and a press conference is due to be given by the Italian Presidency and the European Commission at 6.45pm. The European Commission will be represented at the Eurogroup by President Romano Prodi and Economic Affairs Commissioner Pedro Solbes. The EU's Economics and Finance Ministers are due to meet for a breakfast discussion at 8am on Saturday 13th September in Stresa. The informal meeting as such is due to take place from 10am to 1pm and from 3.30pm to 6.15pm. The European Commission will be represented at the informal meeting by Economic Affairs Commissioner Pedro Solbes and Internal Market and Taxation Commissioner Frits Bolkestein. A press conference by the Presidency, the responsible Commissioners and the President of the European Central Bank is scheduled for 6.30pm on 13^th September.

Eurogroup (GT)

The Eurogroup will start with an exchange of views on economic and budgetary developments. Commissioner Solbes is expected to present the Commission's assessment of the economic situation and the overall budgetary stance of the euro area following the excessive deficit procedure notifications of 1^st September. Member states are expected to update the Eurogroup on budgetary plans and discussions in their respective countries for next year. No specific decisions are expected at this meeting given that most member states are still in the process of finalising their budgets. Ministers will then discuss the forthcoming G7 and IMF Annual meetings as well as exchange opinions on the forthcoming Intergovernmental Conference in particular in relation to the economic governance issues to be included in the future Constitution.

Informal Council of Economics and Finance Ministers

Preparation of the G7 and IMF Annual meetings (GT)

The IMF has recently issued the full edition of its WEO forecasts. Last week, the OECD also published its interim forecast. The Commission's forecast exercise will start soon and our full Autumn forecast is due to be published on 29^th October. But the Commission's preliminary view of global economic developments is broadly in line with the views of the IMF and the OECD.

On the external side, the US economy should lead the global recovery with a gradual pick up in the rest of the world expected for the second half of 2003. Growth is expected to gather pace further in 2004. The Japanese economy is showing signs of stronger than expected growth. It is important to note that a success in Cancun that will help further multilateral liberalisation will further boost world trade growth and contribute to the widespread economic upturn.

The euro-area economy is expected to gather pace at the end of the third quarter and in the fourth quarter of this year. The average growth for the euro-area for this year is expected to be around 0.5%. Up-side and down-side risks to the world growth outlook are more balanced than they were at the time of the Spring forecast.

On development issues this year's meetings will follow on last year's round of conferences, such as Monterrey on Financing for Development and the World Summit on Sustainable Development, and continue to focus on ways to support the poorest countries of the world.

While we have seen some first encouraging results on the increases in Official Development Assistance (ODA) to meet the Millennium Development Goals, it is important to also concentrate on other areas of actions.

The success of the on-going negotiations at the Ministerial meeting in Cancun is, for example, crucial for improving market-access for developing countries.

Another front is to continue progress with HIPC; I am pleased that so far 19 countries have reached the decision point, and eight countries the completion point. The EC has altogether pledged over €1.6 billion to the initiative: €934 million as a donor, to the Trust Fund, and €680 million, as a creditor, for its own claims.

European Convention (GT)

Ministers will exchange views on the Convention proposals for the forthcoming Intergovernmental Conference in particular in relation to the economic governance issues to be included in the future Constitution. The Commission will adopt its Opinion on the IGC in the coming weeks.

Reduced rates of VAT (JT)

Over breakfast, Ministers will discuss the Commission proposal of July 2003 for simplifying the rules on reduced rates of VAT (see IP/03/1024 and MEMO/03/149). The proposal is designed to afford all Member States an equal opportunity to apply reduced rates in certain fields currently restricted to just some Member States (e.g. restaurants, housing and the supply of gas and electricity) and to rationalise the numerous derogations currently applying in some Member States. The objective is to improve the functioning of the internal market and avoid potential distortions of competition, which have given rise to numerous complaints from traders.

Commissioner Bolkestein will, while acknowledging the sensitivities involved for certain Member States, explain the very clear and compelling reasons for which the Commission considered it necessary to make the proposal at this particular time. These reasons justify a proposal that is ambitious, geared towards improving the functioning of the Internal Market and above all that aims to rationalise the complexities created by the transitional VAT arrangements agreed in 1992. In particular:

• The experimental reduced rates for Labour Intensive Services (see IP/02/1367) will expire at the end of this year so a replacement regime must be considered.

• The transitional provisions allowing a number of Member States to depart from the standard and reduced rate framework were not intended to last for the ten years that they have lasted so it is time that they were reviewed.

• The EU must ensure more equitable treatment of all Member States, both old and new. The Commission and the Council agreed on a rigorous approach to VAT-rate derogations granted to the new countries: all the derogations granted were strictly limited in time, with the last one expiring on 1^st January 2010.

• The current simple VAT rules are complicated by a multitude of derogations that have been granted over the years to certain Member States - derogations that are denied to others. This has led to a complex, unequal and confused situation that has been complicated further by a number of Court judgements.

• Theoretically, reduced or zero rates should result in lower prices for the consumer. However, following the experimental application of a reduced VAT rate to certain labour-intensive services, the Commission is convinced that the reduced rate had very little, if any, impact on prices or job creation. A reduction in VAT rates would therefore seem to be a waste of budget resources which could be deployed more usefully elsewhere.

Monitoring Financial Stability (JT)

In the context of an exchange of views on the robustness of arrangements for preventing or managing financial crises with cross-border consequences, Commissioner Bolkestein will emphasise again the Commission's commitment to bolstering financial stability by:

• strengthening the common regulatory safeguards which are the first line of defence for preventing the failure of financial institutions or the spread of systemic risk. He will refer to ongoing work on, for example, capital adequacy, insurance solvency and reinsurance;

• creating the legislative foundations for complete and effective cross-border supervisory co-operation so as to facilitate the management of financial crises.

Commissioners Solbes and Bolkestein will express their support for the continued review by the Council of Ministers' Economic and Financial Committee (EFC) of the practical conditions needed to give effect to these objectives.

Mandatory registration of EU auditors with US PCAOB (JT)

Following the Declaration issued by Finance Ministers at the Council of Finance Ministers on 3 June (see MEMO/03/123), the European Commission has been engaged in intensive discussions with US authorities in order to resolve EU concerns regarding the compulsory registration of EU auditors with the newly-created US Public Company Audit and Oversight Board (PCAOB). As part of this ongoing regulatory dialogue, Commissioner Bolkestein is holding discussions with William McDonough, the Chairman of the US PCAOB, on 11^th September. Mr Bolkestein will briefly update Ministers.