Agenda Ecofin-Raad: hervorming euro-regels (en)

EUOBSERVER / BRUSSELS - A packed agenda awaits finance ministers from the eurozone as they gather in Brussels this evening (15 November) for a two-day meeting.

Top of the agenda is the proposed reform to the EU's Stability and Growth Pact - the rules underpinning the single currency.

These rules have caused huge controversy, with half of the 12 euro countries either in breach of them or enduring difficulties meeting them.

Three percent limit to stay

No change is expected in the rule capping member states' budget deficits at three percent of gross domestic product (GDP).

But the rules are likely to be changed to take more account of member states' different economies.

Economics and Monetary Affairs Commissioner Joaquin Almunia wrote today in the Financial Times, "A union of 25 cannot afford a 'one-size-fits-all fiscal policy given the differences between the structures of each country's economy".

Germany - the biggest net payer into the EU budget - has been pushing for the special status of net payers to be taken into account when performing the deficit calculation. Berlin also wants to see certain types of spending, such as research, excluded from the deficit "bottom line".

Olympic sized deficit

Ministers will also discuss the special case of Greece, which admitted in September that it had underestimated its deficit figures from at least 2000 onwards, causing it to overshoot the three percent limit.

A team of statisticians was dispatched to Athens to investigate and ministers will discuss what punishment, if any, to hand out to Greece, whose deficit problems have not been made more comfortable by the revelation recently that staging the Olympic Games cost twice as much as they budgeted for.

Euro headaches

Also high on ministers' minds will be the high level of the euro against the dollar. The euro has increased by five percent in value against the US dollar and officials are worried that the rise will dampen exports and therefore reduce economic growth.

Some ministers have already expressed concern at this spike in the euro's level and speculation is rife that they may issue a joint statement this evening.

Ministers will also take the opportunity to discuss the paper issued by former Dutch Prime Minister Wim Kok, which suggests ways to meet the EU's ambitious target to become the "most competitive in the world by 2010".

The report - which proposes a system of "naming and shaming" EU governments holding the process up - received a mixed reaction during a meeting of EU leaders last week.

It was broadly welcomed by the Dutch Presidency but German Chancellor Gerhard Schröder is said to have described the "name and shame" concept as "political suicide".

Eurotax discussion

Ministers will also be tasked with handling the political hot potato of a potential eurotax.

During a discussion on how the EU should be funded between 2007-2013, they will consider proposals from the European Commission on the so-called "own resources", which includes "the future introduction of a eurotax and changes to the so-called VAT call rate", according to the Dutch Presidency.

Any proposals to introduce a eurotax are likely to be fiercely opposed by the UK.

Ministers from the 12 countries that share the euro meet tonight and are joined by the 13 other ministers tomorrow morning (16 November).