Euro-zone finance ministers choose Juncker as chairman

Finance ministers from the 12 euro-zone states have chosen Luxembourg's prime minister, Mr Jean-Claude Juncker, as their chairman…

Finance ministers from the 12 euro-zone states have chosen Luxembourg's prime minister, Mr Jean-Claude Juncker, as their chairman for the next two years.

Mr Juncker, who is also his country's finance minister, will represent the Eurogroup of finance ministers at international meetings and liaise on their behalf with the European Commission and the European Central Bank (ECB).

Mr Juncker was widely tipped to become president of the Eurogroup but Austrian opposition threatened to block the appointment until a compromise was agreed yesterday. Austria, which will hold the EU Presidency in the first half of 2006, did not want to miss out on its turn to chair the Eurogroup.

Under the compromise, Austria's finance minister, Mr Karl-Heinz Grasser, will serve as Mr Juncker's deputy for the next two years.

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Both men will retain their positions in their national governments.

Mr Juncker, who is the longest-serving finance minister in the Eurogroup, said he hoped to work with the commission and other ministers to promote a "growth-orientated" economic policy for the euro zone.

The ministers agreed to have more "strategic and fundamental discussions on strategic issues and on common solutions to common issues, for example in issues such as rising healthcare expenditure, lagging labour market participation, rising labour costs and ageing".

They had an initial discussion of the commission's proposals to reform the Stability and Growth Pact, endorsing the direction of the reform plans.

The Dutch finance minister, Mr Gerrit Zalm, said that the ministers wanted to clarify the implementation of the pact rather than weaken it.

"Ministers do not look for a watering down of the pact, but rather for a strengthening and clarification and better implementation," he said.

The Economic Affairs Commissioner, Mr Joaquin Almunia, said he would present more concrete proposals later this year or next year.