Economic and tax credit on the menu of the Ecofin

The European economic and financial situation, including Hungary, will be at the heart of the Ecofin council of return as investors questioned the robustness of recovery on the continent.

Meeting in Brussels on Monday and Tuesday, the Finance Ministers of the Twenty-Seven should also continue to reform economic governance and to study new proposals from the Belgian EU presidency to create a European bank charges.

"The Commission will publish its next economic forecasts on September 13 and I expect that we raise our estimates," said European Commissioner for Economic and Monetary Olli Rehn at a press conference in Finland.

The EU executive said in May forecast an economic growth of 1% in the Twenty-Seven and 0.9% in the euro area in 2010 after a recession of 4.2 and 4.1 % respectively in 2009.

These comments come two weeks after the confirmation of the robustness of German growth in the second quarter.

The situation in Hungary, which has decided to dispense aid awarded jointly by the International Monetary Fund (IMF) and the European Union in late 2008 and wants to refinance itself on the markets, however, continues to weigh.

"Many states are still under pressure and the urgency remains.It is not impossible that we are surprised the Hungarian position in the corridors, "said a diplomat involved in preparations for the meeting.

On Friday, the Hungarian Minister of Economy, Gyorgy Matolcsy, again ruled out renegotiation of the IMF, but he has promised deep reforms in 2011 and 2012 and recalled that his country had exhausted its room for maneuver on fiscal stimulus forcing him to concentrate on monetary policy.

TAX CREDIT AND FINANCIAL

Already mentioned in the spring, creating a tax credit and a tax on financial transactions, were again on the agenda of the Belgian Presidency of the EU, which wants to move these issues during its six-month EU Presidency paydayloans.

The taxation of banks is a consensus within the Twenty-Seven in principle, but discussions are necessary in order to decide the terms.

The transaction is rather more problematic insofar as the Europeans do not want to adopt it if there is not an international decision to that effect to the G20.

"The formula for the tax credit – his attitude and his assignment – will be discussed at the end of the month at the informal Ecofin Council and a decision will be taken at the European Council in October," said a senior diplomat.

"But for now, we have advanced little," added the diplomat.

Another diplomat said that the discussion on the taxation of financial transactions, without reaching this stage will be important for the French presidency of the G20 in 2011.

"A consensus among the bloc on this issue would come up with more force to the negotiating table," he said while pointing to the American, Canadian and Chinese.

Finally, on Monday, ahead of meetings of the Ecofin and the Eurogroup, the working group chaired by Herman Van Rompuy continue its work on creating a "European semester" already endorsed at the June EU summit, of presenting to Brussels National budget plans before their adoption by the Parliaments of each member state.

Ministers should also set a course to the Commission on the introduction of automatic sanctions for countries violating the pact of stability and growth.

However, despite indications to that effect before the summer break, the establishment of a permanent mechanism for crisis management should not be considered until October or even later.

• The EU remains divided on the reform of the Stability Pact
• Rome does not want to organize the Olympic Games 2020
• The measure of imbalances, priority G20 Finance
• Barroso wants to end the unanimous vote in Europe