Push for deal on Stability Pact at EU talks
THE controversial issue of the Stability Pact, to keep member states budget policy in line after the single currency, is to be discussed today by EU finance ministers. The Government hopes agreement can be reached to allow the weekend summit of EU leaders to agree the main points of the move to monetary union.
The EU is close to reaching an agreement on the Stability Pact among countries joining a common European currency, European Commission President Mr Jacques Santer said yesterday.
"It is within our grasp . . . It must be made possible," Mr Santer said in a speech to the European Parliament.
A full agreement has remained elusive, due to a dispute over a strict definition of the economic circumstances which would let a government inside monetary union avoid sanctions.
Germany wants an economic downturn defined numerically while others, in particular France, say it would be preferable to have a more flexible approach that takes account of the economic differences within EU countries.
The issue was discussed by the secretive EU monetary committee of finance and central bank officials yesterday.
Sources close to the talks were hopeful that the monetary committee would make good headway in preparing for this afternoon's Ecofin meeting.
It is possible, however, that a political declaration could be made to accompany the treaty on budget discipline.
Talks are revolving around whether to define the exceptional circumstances under which states can escape sanction if their budget deficit exceeds 3 per cent of national output as a decline in gross domestic product of 1.5 per cent over the year and/or four consecutive quarters of recession.