THE Stability and Growth Pact is working, Economics Commissioner Pedro Solbes insisted as he handed out warnings and started proceedings against six EU States.

The European Commission plans to warn Britain and five other countries that their budget deficits this year are likely to exceed limits set by the European Union’s rules on fiscal discipline, a top official said in Brussels.

FINANCE Minister Charlie McCreevy yesterday welcomed an extraordinary set of Exchequer figures but was rounded on the opposition for "hoarding" the tax bonanza to be used as a pre-election slush fund.

Romano Prodi, president of the European Commission has said that "it is quite probable" that Michel Barnier, will be named French foreign minister.

EU monetary affairs commissioner Pedro Solbes said the pace of the economic recovery in the euro zone will be moderate in the months ahead.

EU monetary affairs commissioner Pedro Solbes yesterday said that he has accepted the post of Finance Minister in Spain's incoming Socialist government, following a meeting with Prime Minister Jose Luis Rodriguez Zapatero.

European Parliament President Pat Cox said today’s bomb attacks in Madrid which claimed at least 62 lives amounted to “a declaration of war on democracy”.

European finance ministers warned Germany today that it would have trouble meeting its commitment to rein in its budget deficit next year if growth fails to meet Berlin’s optimistic projections.

The European Commission raised concerns today about the viability of the German government’s plan to bring its budget deficit back in line with euro rules next year.

European Economic and Monetary Affairs Commissioner Pedro Solbes said today that the continuing strengthening of the euro could affect business confidence in the euro zone.

THE European Commission issued a broadly positive report yesterday on Ireland's economic growth and stability over the next two years.

Britain risks breaking the EU’s 3% deficit cap this year but does not face harsh punishment as it is outside the euro zone, the European Commission said today.

Finance Minister Charlie McCreevy said he would support countries having to set money aside during the good times as part of a revised Growth and Stability Pact governing euro countries.

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

The European Commission will decide tomorrow whether to take EU governments to court for letting France and Germany break the rules running the single currency.

FINANCE Minister Charlie McCreevy is set to become embroiled in the row over the French and German budget deficits as he takes over the chair of the EU Ecofin Council.

IRELAND will be the euro-zone’s second-fastest growing economy next year, well above the EU average and just slightly behind that of the US.

Pedro Solbes, EU economic and monetary affairs commissioner, has denied that the EU Stability and Growth Pact is suspended.

FRANCE looks set to get away with breaking the euro rules as EU finance ministers agreed to postpone a decision on the issue.

EU officials insisted today that giving France more time to avoid punishment for overspending did not weaken budget rules underpinning the euro, despite warnings that they were sending the wrong signal on fiscal discipline.

THE rate of growth for the 12-country euro zone area for 2003 has been reduced to a mere 0.4% from the dismal April prediction of 1%.

THERE are tentative signs that the downturn in Europe’s economy is at an end and that an upturn, especially in the eurozone, is in sight.

France was warned today it faces heavy fines if it does not change its 2004 budgetary plans by next week.

The European Commission survived its most serious test yesterday when its president Romano Prodi refused to sack any of his commissioners over allegations of fraud.

European Commission president Romano Prodi faces a grilling from Euro-MPs tomorrow over the latest fraud scandal to plague the European Commission.

THE murder of popular Swedish Foreign Minister Anna Lindh failed to swing the vote in favour of adopting the euro in yesterday’s referendum.

THERE are signs France was prepared to respond to pressure from its fellow eurozone members and move towards reducing its proposed budget deficit for next year.

FRANCE and Germany are expected to come under the most concerted pressure yet from other EU finance ministers over their plans to exceed the Stability Pact for a third year and face multi million euro fines.

The euro is currently worth $1.15. If you knew nothing of the current global economic situation, but thought that free markets fairly determine foreign exchange rates, you might reasonably conclude that the Eurozone was economically stronger than the US.

THE eurozone economy will find it difficult to expand by even 1% this year, European Monetary Affairs Commissioner Pedro Solbes said on Saturday, effectively scrapping a forecast made three months ago.

The European Commission sought to quash allegations today that senior officials failed to act promptly against widening fraud allegations at the EU’s statistics agency.

THE Irish health sector was singled out by the EU yesterday as an area of concern in terms of controlling the national budget and getting value for money.

France was ordered to get its economy in order “as rapidly as possible” today to rectify a budget deficit which breaches the rules governing the single currency.

By Ann Cahill, Europe Correspondent

IRELAND’S budget plans are in line with the EU’s Growth and Stability Pact but inflation, wages and social welfare spending all need to be kept in check, the European Commission has warned.

France was tonight ordered by the rest of the EU to get its economy in order - or risk the credibility of the single currency.

Europe Correspondent

EU STABILITY and growth pact reforms, a cut in interest rates and falling German inflation are set to combine to provide an uplift to economic sentiment in the coming weeks.

EC President Romano Prodi, under fire for calling the budgetary rules behind the euro “stupid,” tonight asked for more power to enforce them in a more “intelligent” way.

THE European Commissioner in charge of the single currency insisted yesterday that the rules for running the euro were working perfectly well, despite a claim from his boss that they are stupid.

The European Commissioner in charge of the single currency insisted today that the rules for running the euro were working perfectly well – despite a claim from his boss that they are “stupid“.