BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in:  Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Tuesday, 5 March, 2002, 09:33 GMT
Tricky issues at EU finance meeting
A signpost for Brussels
The meeting is a mixture of finance and politics
European finance ministers face a mixture of big-picture strategy and small-scale policy niggles, as they prepare for their monthly meeting in Brussels.

The 12 eurozone finance ministers met on Monday evening, the prelude to the full 15-minister get-together - the so-called Ecofin - on Tuesday.

The main item on the agenda is hammering out ways to speed up structural reforms.

Ecofin is scheduled to adopt a "key issues" document, prepared by the Spanish government, which sets out a timetable for reforms such as energy-sector liberalisation.

But this should be little more than a rubber stamp; the real work will be coming to agreements on a series of seemingly minor issues - from central bank appointments through to a tax on wine.

Job jostle

The most immediate dark cloud hovering over the meeting is the need to identify a new vice president for the European Central Bank (ECB) - something that finance chiefs hope to have wrapped up before the big EU Barcelona summit on 15-16 March.

Didier Reynders
Mr Reynders is boosting Belgium

Christian Noyer, the incumbent, is due to step down by May, and would ordinarily be replaced by another French national.

But since the Frenchman Jean-Claude Trichet is currently in line for the job of ECB president, in succession to Wim Duisenberg, other nations are coveting the vice-presidency.

Last week, Didier Reynders, Belgium's finance minister, said the job should go to a Belgian, since the presence of the Benelux countries on the ECB's board would be eliminated by Mr Duisenberg's departure.

With a string of ECB board members due to step down over the next few months, the business of appointing successors has become unexpectedly complicated.

Location, location, location

A related problem, again bound up with issues of national pride, is the location of a new EU bank for the development of the Mediterranean region.

Christian Noyer
Mr Noyer's job is being fought over
Some members want to see the Euro-Mediterranean Development Bank made a subsidiary of the European Investment Bank, the EU's existing finance arm.

But Spain, which currently holds the presidency of the EU, wants a fully-fledged new bank based in the Spanish city of Barcelona.

This would have a knock-on effect on another location debate, this time over the site for the Food Safety Agency, for which Barcelona is one of the bidders.

The British problem

A further flurry of minor complications centres around UK Chancellor of the Exchequer Gordon Brown, who has clashed with the EU orthodoxy in the past.

Gordon Brown
Mr Brown's tax scrapping plans are causing concern
This time, media reports over the weekend indicated that Mr Brown may become embroiled in a row over his plans for tax breaks on houses in poorer areas.

The European Commission is worried that Mr Brown's decision to waive stamp duty on cheap houses in some areas could constitute a breach of rules on state aid.

Mr Brown is also at the forefront of plans to scrap temporary government aid for airlines. The insurance cover was intended to help them out after 11 September.

The plan, which could see government support scrapped as early as 20 March, is likely to prove controversial.

Wine wars

Most minor, but possibly most controversial of all, is a plan to slap a new tax on wine.

Wine-drinking in Pamplona
Celebrate, while you can still afford it
The alcohol excise duty, planned to come into force next year, could raise the price of wine by 14 euro cents (9 pence; 12 US cents) a litre.

The Italian government is strongly against the plan and aims to use the Ecofin meeting to shoot it down.

Wine, a major export for Italy, is currently subject to almost no tax within the country, while other EU states levy high excise taxes.

Some Italians commentators suspect a conspiracy among beer-drinking, high-tax North European countries is behind the proposal.

See also:

13 Feb 02 | Business
Succession scramble at ECB
07 Feb 02 | Business
Duisenberg to quit ECB
21 Jan 02 | Business
Budget worries at euro talks
04 Dec 01 | Business
EU eyes German budget deficit
30 Nov 01 | Business
France and Germany lose jobs
21 Sep 01 | Business
German business confidence falls
22 Aug 01 | Business
Germany's feeling the pinch
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories