EU finance ministers face an unprecedented legal challenge over the euro rules, fallout from the Enron-style meltdown at Parmalat and other new headaches as they were due gather yesterday night for the first time this year.
While not on the official agenda, ministers were expected to grill European Commission officials about last week's move to haul them before the European Court of Justice.
The Commission was angered by the decision by finance ministers in November to let Germany and France off the hook despite repeated violations of the fiscal discipline pact adopted along with the euro.
Commission President Romano Prodi has insisted the step is necessary to protect the Commission's role as guardian of EU treaties, but even some of the Commission's allies among the smaller countries were critical.
Austrian Chancellor Wolfgang Schuessel told the daily Die Presse the legal challenge was "a mistaken political signal."
Economists pointed to the institutional clash as more evidence of "political divisions" in Europe that could eventually pose a threat to the "stability culture" underpinning the currency shared by 12 countries.
"Those investors who make decisions for the long term should allow for the risk of the euro falling apart," Morgan Stanley's London-based economist Joachim Fels warned in a bank report being published yesterday.
Short term, however, finance ministers were more concerned with the threat the euro's recent rise against the dollar might pose to the continent's economic recovery, especially after official data released last week showed Germany's economy -- Europe's biggest -- shrank last year for the first time in a decade.
"The industrial recovery is under way," said Gwyn Hacche, European economist at HSBC in London. But "the recent rise of the euro means this may not last."
The European Central Bank's chief economist, Ottmar Issing, said Friday that Germany's weakness wasn't due to the euro's strength but that he was "concerned" about it nonetheless. He was due to expand on the subject at a European Parliament committee hearing today.
Over lunch today, EU finance ministers were to debate International Accounting Standards, which all public companies in the EU are to adopt next year, and be briefed on the Parmalat affair.
The scandal at the Italian food conglomerate has been growing since Dec. 19, when it acknowledged that nearly US$5 billion it claimed to have in a Bank of America account didn't exist.
The European Commission is due to unveil proposals next month to toughen auditing supervision and corporate governance rules, an initiative that began in the wake of the Enron and other corporate scandals in the US.
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