Treasury written statement – made on 8th February 2007.

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Photo of Gordon Brown Gordon Brown The Chancellor of the Exchequer

I represented the UK at the Economic and Financial Affairs Council (ECOFIN) on 30 January 2007. The German Finance Minister, Peer Steinbruck, chaired the Council.

German Presidency Work Programme

Ministers took note of a presentation by the German presidency on its ECOFIN work programme for the next six months. The presidency noted that Europe continued to face major challenges, for example from globalisation. ECOFIN's work under the German presidency would reflect this, including through further integration of the internal market.

The UK added its support and stressed the importance of promoting an open and flexible single market, as set out in the HMT-DTI paper on single market reform published on the same day. This paper stresses the need for a Single Market which allows European businesses to compete in global markets, while fostering innovation and market dynamism. A revised strategy should therefore focus on driving up competition and take prioritised action where the potential economic benefits are greatest, based on clear evidence, and use a wider range of policy tools to achieve a well-functioning single market. The UK also said that enhancing EU-US economic relations and tackling unfair tax competition had a part to play.

Implementation of the Stability and Growth Pact

Commissioner Almunia outlined the Commission's recommendation to abrogate France's excessive deficit procedure, as the deficit was now sustainably below 3 per cent. Member states welcomed this recommendation and adopted a decision under article 104 (12) of the treaty abrogating decision 2003/487/EC on the existence of an excessive deficit in France.

Convergence Reports by the Commission and the European Central Bank

Ministers took note of a brief presentation by the Commission and the European Central Bank on the December 2006 convergence report on the member states (excluding Lithuania, Slovenia and Sweden) with a derogation from euro membership. The report concluded that the nine member states assessed did not fulfil all the convergence criteria, however the Commission noted significant progress was being made on inflation, fiscal stability and exchange rates.

Current Status of Slovenia's Adoption of the Euro

The Council was briefed by the Slovenian Finance Minister, Andrej Bajuk, the Commission and the European Central Bank on the introduction of the euro in Slovenia. The Commission applauded Slovenia's handling of the introduction of the euro.

Preparation of the Spring European Council

Ministers held an orientation debate on matters to feed into the spring European Council. This included the Commission annual progress report, the proposed update to the integrated guidelines with country specific recommendations and the draft ECOFIN key issues paper. Discussion centred on the ECOFIN priorities for the key issues paper, ahead of its formal adoption at the February ECOFIN.

The UK stressed the importance of opening up product and capital markets, especially financial services, utilities and energy and in reducing regulation in line with the HMT-DTI Paper on single market reform mentioned earlier. The UK also added that, in the field of tax, tackling unfair tax competition was important in improving economic performance. The German presidency agreed to reflect on the discussion and will subsequently return to this topic at the February ECOFIN.

Better Regulation

The Commission presented a Communication and an action plan on efforts to reduce administrative burdens on businesses, which includes setting a target for reducing administrative burdens in the EU. The UK expressed the view that this was a key issue for the EU economic framework. Conclusions are expected to be adopted at the next ECOFIN Council meeting and will contribute to the spring European Council.