Finns to get go-ahead on convergence

Date: 19/10/1995

EU finance ministers will give their blessing next week to Finland's programme for 'converging' its economy towards the targets on price and budgetary control required as the entry ticket into economic and monetary union.

Ministers were due to discuss Austria's convergence programme at their meeting in Luxembourg on Monday (23 October), but postponed the debate following news of the Austrian government's collapse.

Ministers will instead hold a short debate on Finland's programme, which is likely to avoid the criticisms of excessively hopeful economic forecasting that have marred scrutiny of the plans of several other member states. “Nobody seems to think we have been over-optimistic,” a Finnish official said.

The Finnish government expects to shrink its budget deficit to less than 3&percent; of national income by 1999, while economic growth will slow from 5&percent; this year to 2.5&percent; in 1999.

Ministers will also have their first genuinely 'structured dialogue' with their counterparts from Eastern and Central Europe. The rambling nature of the last such meeting, under the presidency of the then French Finance Minister Alain Madelin, infuriated ministers. As a result, they ensured this meeting would focus on one issue with a set list of leading speakers.

The chosen topic is reform of the financial sector in Central and Eastern Europe. Hungarian and Latvian ministers will talk on the banking crisis and bad loans, the Bulgarians and Lithuanians on how to set up independent and effective supervisory authorities, the Poles and Romanians on bank privatisation, the Czechs on developing capital markets and the Estonians and the Slovaks on liberalising capital movements.