Ecofin vergadert parallel aan IGC over werkgelegenheid en groei (en)

EUOBSERVER / BRUSSELS - Although all eyes will be on Constitutional matters, EU finance ministers are expected to rubber stamp initiatives to boost jobs and growth - the crucial dual challenges facing the European economy.

A draft document, seen by the EUobserver, indicates that Finance Ministers - meeting this morning as part of the wider European Summit - are expected to endorse the so-called "European Action for Growth".

This plan aims to boost economic growth in Europe by increasing investment in large-scale cross-border transport projects and also in telecommunications, energy, research and development and innovation.

At the heart of the plan is the "quick-start programme". The Commission has proposed 56 projects that can begin immediately and ministers are expected to welcome the proposals.

Finance for the projects will come from a combination of EU funds, money from Member States and from private investment. The EU will increase its contribution from ten percent of the money required to 20 percent for transport projects. Furthermore, it is hoped that private investors will be encouraged by loans from the European Investment Bank (EIB).

The emphasis will then be placed on individual Member States to remove some of the technical and legal obstacles to these projects.

Ministers are also expected to request a "half-term report" to be drawn up at the end of 2007 to see what impact the "growth plan" has had on economic growth.

Most economists believe that the impact on short-term growth will be minimal but that the initiative could bear fruit in the longer term.

Jobs, jobs, jobs

But European leaders are still worried about unemployment in the EU, which stubbornly refuses to come down from its current level of about eight percent.

Finance Ministers are therefore expected to welcome a report written by former Dutch prime minister Wim Kok - entitled "jobs, jobs, jobs".

The report says that to succeed in creating more jobs, Europe needs to invest more in training and retraining workers and improve economic policy to coerce people into the labour market.

At a "social summit" ahead of the main European Summit, held yesterday (11 December), the Italian prime minister Silvio Berlusconi and the Commission President Romano Prodi met representatives from trades unions and business groups to endorse the Kok report.

In a meeting which Mr Prodi described as "particularly productive", all parties were agreed on the need to boost employment and there was widespread praise for the report.

The recommendations in the report will be discussed by Finance Ministers today (12 December) and then again in the Spring Council next March, which will be devoted to economic reform and the implementation of the Lisbon agenda - which aims to make the EU the most competitive economy in the world by 2010.

No reopening of wounds

The scars left by the traumatic last meeting of Finance Minister - where France and Germany rejected the Commission's disciplinary measures relating to the euro rules - will remain untouched.

The topic may be raised in the context of economic governance in the Constitution talks but Mr Prodi reminded journalists most firmly, "reform of the Stability Pact will not be discussed".