Economic and Monetary Union

Economic growth in the Community averaged 1.7 per cent in 2001 compared with 3.3 per cent in 2000. Despite this, the ministers of finance several times emphasised their determination to continue with a stability-oriented budget policy and stressed that specific difficulties being experienced by certain sectors must not result in a subsidy race. They also called for an enhanced readiness to carry through the structural reforms that are necessary to realise medium-term growth and employment potential. The European Council in Stockholm in March reviewed the implementation of the Lisbon Strategy for employment, economic reform and social cohesion.

Other main themes discussed by the ECOFIN Council included combating terrorism, the tax-package and financial services. The directive on money laundering was extended to cover advisory and other services. The mandate of the OECD's Financial Action Task Force (FATF) was extended to cover terrorism, and the member states committed themselves to applying the recommendations of the FATF consistently in order to prevent money laundering. The main issue in the tax-package was taxation on savings income of non-residents. Negotiations are being held with third states with a view to their introducing similar measures in order to prevent a flight of capital out of the EU. Substantial progress was made with the implementation of the Action Plan on Financial Services, including agreement on cross-border payments and financial services, and the statute of the European company.

The introduction of the Euro coinage and bank notes on 1 January 2002 was systematically and comprehensively prepared, and the progress in each country of the Euro group was monitored. During the critical phase an information network was established between the finance ministries, central banks, the European Central Bank and the European Commission, and the population was also comprehensively informed about the new currency. The introduction of the Euro indicates the readiness of the participating states for closer cooperation on economic issues, and it strengthens the identity and role of Europe in an international context.