McCreevy hopeful of progress at vital talks

FINANCE Minister Charlie McCreevy will host his EU colleagues and central bank governors at a meeting in the controversial Punchestown Exhibition Centre in his Kildare constituency tomorrow.

In what is expected to be a classic piece of horse trading, they hope to agree their nominee for managing director of the International Monetary Fund to succeed Horst Koehler from Germany.

The other issues on their agenda include a discussion of the European Commission’s draft €1,000 billion budget for 2007 to 2013; preparation of the EU’s contribution to the spring meetings of the IMF and the World Bank in Washington; the financial services and markets issues including an update on the EU/US search for a common approach to financial services regulation to ensure greater access to capital markets.

They will also consider the latest data on the state of the EU economy, which is pessimistic, with the US and Japan showing definite signs of recovery but with little good news for most of Europe.

The contest for the IMF post is largely between the French nominee, Jean Lemierre and Spain’s Rodrigo Rato. Mr Rato, Spain’s outgoing finance minister, was originally a favourite for the post. But his popularity has slipped with his party losing the general election to the Socialists last month and the appointment of another Spaniard to the European Central Bank by the ministers last week. However, he has the support of the Latin American countries.

Mr Lemierre, currently head of the European Bank for Reconstruction and Development, is being tipped for the job with the German’s indicating their support for him. Diplomats suggest the deal is in exchange for a German getting the planned post in the incoming commission to oversee all competitiveness aspects of the EC policies. The Japanese have also indicated their support for him.

Mr Koehler resigned on March 4 last to run for president of Germany. The IMF is traditionally chaired by a European while its sister organisation, the World Bank, is usually headed up by an American.

This meeting will be one of the largest to take place in Ireland during the Irish presidency, with up to 250 delegates, including the ministers for finance and Central Bank Governors from all of the 25 countries of the enlarged Union.

Mr McCreevy said he hopes to make good progress on the items on the agenda. “The timing of this Ecofin meeting has particular political importance, with the formal welcoming of the 10 new member States into the EU taking place a few weeks later, on May 1,” he said.

The ministers and governors will be presented with a special collectors’ coin produced by the Central Bank and Financial Services Authority of Ireland to mark their meeting in Ireland.