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Mon, Mar 21, 2005 - Page 12 News List

EU tries again to amend rules to stabilize the euro

AP , Brussels, Belgium

EU finance ministers were to try again yesterday to amend rules for securing a stable euro, weighing new ideas that go a long way to meet German and French demands for more slack to spend their way out of economic downturns.

EU nations have been deadlocked for months on rewriting the euro's "Stability and Growth Pact" while leaving intact the key requirement that a euro-zone nation's annual budget gap cannot exceed 3 percent of gross domestic product.

Luxembourg Premier Jean-Claude Juncker, who presides over the reform talks, said last week negotiations had degenerated into finger-pointing.

Yesterday's meeting was not expected to be much different, and the EU leaders may be left to strike a deal tomorrow when they open a two-day summit in Brussels.

Germany and France -- the two biggest euro-zone economies and the most notable offenders of the euro rules -- want more leeway to reverse economic downturns.

Officials said Juncker had gone far to meet their concerns, proposing that violators of the euro stability pact invoke their own mitigating circumstances to escape punishment.

Germany wants credit for the costs of German unification as well as its payments to the EU budget that total 22 percent of total outlays. France wants to use its spending on research and defense as an excuse to break the 3-percent norm.

The Netherlands, Sweden and others oppose weakening the 3-percent norm

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