McCreevy faces concern over euro

FINANCE Minister Charlie McCreevy chairs his first Ecofin meeting in Brussels today amid concern over the strength of the euro against the dollar.

He has a potentially explosive agenda before him that includes the commission’s court move against finance ministers; the Parmalat scandal and reduced VAT rates.

Up to now, the EU has been careful to play down the impact of the euro’s strength, but the first changes to this policy appeared last week when ECB president Jean Claude Trichket spoke about it. The euro weakened as a result.

A senior Irish diplomat, speaking before last night’s eurozone ministers’ meeting said: “the problem of the volatility and strong euro is evident to everybody. These issues will be there and very much to the fore in the discussions.”

The change in the official position to the strong euro was also referred to by the spokesperson for economic and monetary affairs commissioner Pedro Solbes.

“The language being used by the Central Bank and the euro group ministers on exchange rates has changed slightly since the beginning of the year, giving increased emphasis to the dangers linked to the volatility and this will be discussed.”

He said the ECB was not making any estimate about the correct value of the euro. Mr Solbes is expected to get a cool reception from finance ministers over his decision to take them to court for their failure to follow the correct procedure in relation to France and Germany’s breaching of the Stability and Growth Pact.