ECONOMY

Ecofin agrees that eurozone growth shall be 0.75 pct

Brussels – European Union finance ministers agreed yesterday that growth in the eurozone will not exceed 0.75 percent of its gross domestic product (GDP) in 2003, putting paid to rumors about a recovery this year. Last fall, finance ministers had concluded that growth in the eurozone would pick up to 2 percent this year, after an anemic, under 1 percent growth in 2002. Last spring, this optimistic estimate was revised downward, to 1 percent. But, it seems now, even this was too much to hope for. In finance minsters’ meetings on Monday night and yesterday – first among the Eurogroup, that is, the 12 eurozone members, and then as part of Ecofin, which brings together all 15 EU member states – the guerilla war pitted France against all the other eurozone members over the Stability and Growth Pact. French Finance Minister Francis Mer told his colleagues of French President Jacques Chirac’s concern over the pact’s provisions regarding the budget and whether they could be «temporarily relaxed» in order to facilitate recovery. As usual, all other members, especially those representing smaller countries, were adamantly against the proposal. «We should stop putting the Stability Pact on trial,» said Economy and Finance Minister Nikos Christodoulakis. On the positive side, Ecofin ministers agreed to restart the so-called Trans-European Networks (TENs), which include road, railroad, fuel and telecommunications networks, with the help of private and public funds, as well as loans from the European Investment Bank. The ministers asked Eurostat, the EU’s statistics agency, to devise a method to ensure that this expenditure will not affect member states’ budget deficits and public debt. Ecofin approved the application of International Accounting Standards (IAS) by listed companies from January 1, 2005. Greece plans to introduce IAS a year earlier. The finance ministers also approved the creation of the so-called «European passport,» an information bulletin which all EU-based companies that want to draw capital from other EU member states, either in the form of bank loans or as part of a campaign for share subscriptions, must possess. The passport will be a standardized document requiring specific information about the companies’ finances and activities. All financial information will use IAS. Public subscriptions will also be standardized across the EU.