PM for important Ecofin Council on Tuesday

The Prime Minister, Dr Lawrence Gonzi, will be in Brussels on Tuesday to participate in what is being described in EU circles as a crucial meeting of the Union's finance ministers. The meeting is set to discuss the controversial topic of changes to the Growth and Stability Pact of the Union, in other words the rules underpinning the euro.

During the meeting, Malta will also be on the agenda, as finance ministers will discuss the progress of the island's financial situation over the last year and recommend further action.

During this meeting, Dr Gonzi will be accompanied by Parliamentary Secretary Tonio Fenech.

Speaking to The Sunday Times, Mr Fenech underlined the importance of the meeting which will be "opening the way to further development in the EU's economic policy". He said that the changes needed to the euro rules have been up for discussion for some months.

He said Malta favours some minor flexibility to the present rules, as in the way the deficit procedure mechanism calculations are made. However it agrees with the importance that member states should give to their economic and financial governance.

Tuesday's meeting will be presided over by Luxembourg's Prime Minister Jean-Claude Juncker and due to its importance will also be attended by the President of the Commission, José Manuel Barroso.

Council sources told The Sunday Times that, besides the euro discussion, the Economic and Financial Affairs Council will debate the economic and financial programme of the Luxembourg Presidency.

Within the framework of the Stability and Growth Pact, the Council will also take a decision on excessive deficit procedures against Germany, France, the Czech Republic, Cyprus, Malta, Poland, Slovakia, Greece and Hungary. The ministers will then examine the stability programmes of Luxembourg, the Netherlands and Austria as well as the convergence programmes of the Czech Republic and Sweden.

Last December, the European Commission concluded in a report submitted to the Council that Malta is on track for correcting its large financial deficit and that no further recommendations are required at this stage.

In its communication, following a close study of the budget measures and an update of the convergence plan submitted by the Maltese government last November, the Commission stated that "based on current information and on the basis of the measures detailed in the 2005 budget, it appears that the Maltese Government has taken effective action regarding the measures envisaged to achieve the 2005 deficit target in response to the Council recommendation".

The Commission added that "while the budget for 2005 was presented after the November 5 deadline, this does not change the assessment of effective action because the no-policy change projection for the 2005 deficit in the Commission services 2004 forecast was broadly in line with the target set in the May 2004 convergence programme. Accordingly, the Commission concludes that no further steps are necessary at this point under the excessive deficit procedures."

Sources told The Sunday Times that the EU finance ministers are expected to approve the Commission's recommendation without any amendments.