BRUSSELS (AFX) - The monthly meeting of euro zone finance ministers in Luxembourg on Monday evening is set to acknowledge the European economy is slowing down, and look at its impact on budget balances, according to a source from a large member state of the zone. The ministers are also likely to discuss how or if to present the lower growth expectations publicly, he added.
As the European Commission considers it took the possible slowdown into account when drawing up its spring economic forecasts, it is not about to revise downwards its prediction of 2.8 pct euro zone GDP growth this year, a commission source said. The commission will tell the ministers that Europe is still growing at above its potential growth trend and is still benefiting from last year's performance, he said.
Nevertheless indications are that GDP growth is lower than anticipated in several states, the sources said.
Ministers will be quizzing German finance minister Hans Eichel on how he expects to maintain Germany's EMU stability programme budgetary targets of deficits of 1.5 pct this year and 1.0 pct next year, if GDP growth dips, a national eurogroup official said.
Germany is due to announce budget plans for next year soon. The ministers will debate the overall international economic picture, especially developments in the US, as well as the euro zone, officials said.
While France and Belgium are euro zone member states dissatisfied with the performance of the ECB in failing to prevent a renewed slide in the euro's external value, the eurogroup is not expected to comment on this in public, the sources said.
The eurogroup will nevertheless hold a press conference on Tuesday morning at a time still to be set.
It may underline some of the work it is carrying out on the changeover to the physical euro at the end of the year, namely on dual pricing, rounding and the early circulation of some notes to aid familiarisation, the sources said.