The uncertain economic situation in 2008 and the adoption of conclusions relating to the assessment of Stability and Convergence Programmes of the first group of member states were the main issues examined during the Economic and Financial Affairs Council meeting, here on Tuesday.
Cyprus was represented at the ECOFIN by Finance Minister Michalis Sarris.
Ministers concluded that ongoing financial turmoil, the slowdown in the US and continued high oil and commodity prices have sharpened downside risks and external imbalances are emerging in some member states. However, despite a less favourable environment and increasing uncertainty, the EU has solid fundamentals which underpin growth.
While real GDP for the EU in 2007 increased by 2.9%, it is expected that economic growth in 2008 will moderate, but should remain near potential.
In 2007, the overall budgetary situation improved markedly also due to cyclical conditions.
Employment has continued to increase considerably, with the employment rate forecast to move from 64.4% in 2006 to 66.2% by 2009. Labour productivity has improved somewhat but remains a challenge for the EU, the Ministers added.
They noted that in the current context, it is key to avoid complacency and sustain reform efforts through the full implementation of the National Reform Programmes and the Integrated Guidelines for Growth and Jobs.
They stressed that EU economic and financial policies should be geared towards ensuring macro-economic stability, taking up the opportunities of globalisation and addressing the longer-term challenges ahead including ageing populations and climate change. The EU budgetary framework, as defined by the revised Stability and Growth Pact, gives the appropriate tools to cope with the current situation.
In addition, the overall budgetary situation in the EU has improved as a number of member states have consolidated in good times.
In the context of preparations for the Spring European Council, to be held on 13 and 14 March, the Ministers adopted the Key Issues Paper as well as the conclusions on the efficiency of economic instruments in achieving energy and climate change objectives and exchanged views on better regulation.
They also accepted the Council recommendation on the discharge to be given to the European Commission in respect of the implementation of the EU budget for the financial year 2006.
