9636/97 (Presse 235) C/97/235 2023rd Council meeting – ECOFIN – Brussels, 7 July 1997 President: Mr Jean-Claude JUNCKER Prime Minister and Minister for Finance of the Grand Duchy of Luxembourg 1 C O N T E N T S PARTICIPANTS ......................................................... 3 ITEMS DISCUSSED LUXEMBOURG PRESIDENCY WORK PROGRAMME............................. 5 CONVERGENCE PROGRAMME OF ITALY..................................... 6 FOLLOW-UP TO THE AMSTERDAM EUROPEAN COUNCIL ........................ 8 TECHNICAL CHARACTERISTICS OF EURO COINS .............................. 8 STAGE III OF EMU ...................................................... 9 BROAD ECONOMIC GUIDELINES.......................................... 10 STRUCTURED DIALOGUE – MEETING WITH THE FINANCE MINISTERS OF THE CCEE . 11 ITEMS ADOPTED WITHOUT DEBATE Development: Developing countries – co-financing of NGOs ..................................... I Consumer affairs: Consumer credit .......................................................... I Culture: WIPO Copyright and Performances and Phonograms Treaties ........................ II In the case of legislative acts, votes against and abstentions are indicated. Decisions including statements to which the Council has decided to grant the public access are indicated by asterisks; the statements in question may be obtained from the Press Office. 2 The Governments of the Member States and the European Commission were represented as follows: Belgium: Mr Philippe MAYSTADT Deputy Prime Minister, Minister for Finance and Foreign Trade Denmark: Ms Marianne JELVED Minister for Economic Affairs Mr Michael DITHMER State Secretary for Economic Affairs Germany: Mr Theo WAIGEL Federal Minister for Finance Mr Jürgen STARK State Secretary, Federal Ministry of Finance Mr Klaus BÜNGEL State Secretary, Federal Ministry of Economic Affairs Greece: Mr Yiannos PAPANTONIOU Minister for the National Economy Spain: Mr Rodrigo de RATO Y FIGAREDO Deputy Prime Minister and Minister for the Economy and Finance France: Mr Dominique STRAUSS-KAHN Minister for Economic Affairs, Finance and Industry Ireland: Mr Charlie McCREEVY Minister for Finance Italy: Mr Carlo Azeglio CIAMPI Minister for the Treasury Luxembourg: Mr Jean-Claude JUNCKER Prime Minister and Minister for Finance Mr Robert GOEBBELS Minister for Economic Affairs Mr Marc FISCHBACH Minister with responsibility for the Budget Netherlands: Mr Gerrit ZALM Minister for Finance Austria: Mr Rudolf EDLINGER Federal Minister for Finance Portugal: Mr António de SOUSA FRANCO Minister for Finance Finland: Mr Sauli NIINISTÖ Minister for Finance Mr Raino SAILAS State Secretary for Finance 3 Sweden: Mr Erik ÅSBRINK Minister for Finance United Kingdom: Mr Gordon BROWN Chancellor of the Exchequer Commission: Mr Jacques SANTER President Mr Yves-Thibault de SILGUY Member Mr Mario MONTI Member Other participants Sir Nigel WICKS Chairman of the Monetary Committee Mr Henri BOGAERT Chairman of the Economic Policy Committee 3 Participation of the CCEE in the structured dialogue meeting: Bulgaria: Mr Muravey RADEV Minister for Finance Estonia: Mr Agu LELLEP State Secretary at the Ministry of Finance Hungary: Mr Péter MEDGYESSY Minister for Finance Latvia: Mrs Aija POCA Minister of State for Finance Lithuania: Mr Algirdas Gediminas ŠEMETA Minister for Finance Poland: Mr Marek BELKA Deputy Prime Minster and Minister for Finance Romania: Mr Valentin LAZEA State Secretary at the Ministry of Finance Slovak Republic: Mrs Tatiana SILHÁNKOVÁ State Secretary at the Ministry of Finance Czech Republic: Mr Ivan PILIP Minister for Finance Slovenia: Mr Mitja GASPARI Minister for Finance 4 PRESENTATION OF THE LUXEMBOURG PRESIDENCY WORK PROGRAMME The Council held a public, televised debate on the Luxembourg P residency's work programme in the ECOFIN domain for the second half of 1997. When presenting his programme, the President of the Council highlighted its two central themes which are on one hand implementation of Phase III of EMU and continuation of the preparations for that purpose and on the other hand taxation, with regard to both proposals under consideration and giving a new impetus. The President also emphasized the following four priorities: the follow-up to the Amsterdam conclusions, a new impetus for keeping employment at the top of the Union's political agenda, future financing of the Union (which forms part of the 2000 Agenda), work in the field of prudential supervision and finance and assumption of the Community's responsibility in the outside world. The debate – during which the President of the Commission and all the Member States' Ministers for Finance or Economic Affairs commented on the Presidency programme – revealed that the speakers considered that it tackled appropriately the main challenges facing the Community in the ECOFIN area. They assured the Presidency of their full support in implementing this ambitious programme. 5 CONVERGENCE PROGRAMME OF ITALY – Conclusions The Council carried out an examination of the Convergence Programme of Italy for the period 1998- 2000. The Council acknowledged with satisfaction the remarkable progress in convergence achieved by Italy, particularly as regards inflation, interest rates and currency stability. The Council welcomed the Programme's intention to steadily reduce the government deficit in order to complete the fundamental adjustments that are taking place in this field in Italy; in addition, the Council appreciated the commitment reiterated by the Italian government to comply strictly with the deficit target of 3% of GDP in 1997. The Convergence Programme aims at reducing the government deficit to 2,8% of GDP in 1998, 2,4% in 1999 and to 1,8% in the final year of the programme. The Council takes note that these budgetary objectives correspond to those of the Documento di Programmazione Economica e Finanziaria (DPEF) 1998-2000, which have received full endorsement from the Italian Parliament. The Council underlines the importance of this strong political commitment behind the objectives of the programme. Such a commitment is crucial and requires the adoption of all the necessary measures for an effective achievement of the budgetary objectives of the programme. Moreover, the Council appreciated the commitment of the Italian government to achieve the budgetary objectives of the programme on a year-by-year basis. While welcoming these objectives, the Council invites the Italian authorities to consider them as ceilings, with a view to preventing shortfalls and to fostering faster decline in the government debt ratio. The Council believes that the assumptions on growth and on interest rates retained in the convergence programme scenario are reasonable; however, it points out that the evolution of interest rates depends crucially on the consolidation of an environment of low inflation and monetary stability and on the successful implementation of the envisaged structural budgetary adjustment. 6 The Council considers it appropriate that the budgetary strategy of the programme relies mainly on expenditure restraint and that most of the adjustment is envisaged for 1998. It also considers that the programme identifies the correct areas for measures to be taken in 1998. The Council emphasizes that the robustness and credibility of the implementation of the programme will very much depend on the quality of the concrete measures to be introduced. Therefore, it urges the Italian government to adopt measures with permanent effect on deficit reduction, namely in the framework of the presentation of the Budget Law for 1998. Indeed, this is the only way to secure the continuity of the adjustment effort and to ensure that a sustainable budgetary position is achieved. The programme reaffirms the engagement of the Italian authorities in a programme of sweeping structural reforms in several areas. These reforms are most welcome since they will benefit the public finances and also have a favourable impact on the efficiency of the entire economic system. Of crucial importance is the reform of the welfare state. The Council strongly supports the commitment expressed in the programme to keep expenditure on pensions constant in terms of GDP during the period of the programme; determined and effective measures in this area are indispensable to ensure the sustainability of fiscal consolidation. Of great importance is also the reform of the Italian tax system; in this area particular attention has to be paid to the avoidance of revenue shortfalls in the transition period. The Council invites the Commission and the Monetary Committee to monitor the implementation of the programme and to report to the Council once the concrete budgetary measures have been defined, namely, in presentation of the Budget Law for 1998. 7 FOLLOW-UP TO THE AMSTERDAM EUROPEAN COUNCIL The Council took note of the information supplied by its President concerning the Presidency's intentions on the work to be carried out as a result of the European Council in the context of economic and monetary union (in particular with regard to coordination of economic policies and external aspects of the euro), and preparations for the extraordinary European Council meeting on employment scheduled for the second half of November. TECHNICAL CHARACTERISTICS OF EURO COINS Having noted the positive result of the technical verification of capacity to produce euro coins made from Nordic Gold alloy, the Council confirmed the political agreement reached at its previous meeting on the Commission's proposal concerning denominations