§ Mr. BurnsTo ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest meeting of the European Community's Economic and Finance Council.
§ Mr. LamontI represented the United Kingdom at the meeting of the Economic and Finance Council of the European Community in Brussels on 18 January.
The Council discussed the economic situation in the Community and national measures to promote recovery in its biannual multilateral surveillance exercise. Ministers agreed that, with the EC economy now in recession, member states should step up their efforts to promote growth and reduce unemployment and that they should strengthen the co-ordination of their economic policies. Wage restraint and healthier public finances with an increased emphasis on investment would help to create the conditions for lower interest rates across Europe. These principles are all consistent with measures I announced in my autumn statement.
The Commission will be contacting member states to discuss their economic plans in order to offer a general picture of the action member states are taking at the next meeting of ECOFIN.
The Council was given a brief presentation by the Commission and the President of the European Investment Bank (EIB) of their plans to follow up the conclusions of the Edinburgh European Council by establishing the new European investment fund and EIB lending facility. All member states stressed the need to bring both new facilities into operation as soon as possible.
The Council adopted a proposal for a balance of payments loan for Italy of 8 billion ecu (approximately 436W £6.3 billion). This loan will be paid in four tranches conditional upon Italy's meeting its targets for reducing its budget deficit.
The Council also made a statement welcoming the decision of the new Irish Government to maintain the existing parities of the Irish punt within the ERM.