EUROGROUP: BUDGET CONSOLIDATION A PRIORITY DESPITE ECONOMIC SLOWDOWN.

Eurogroup President, Didier Reynders, Belgium's Finance Minister, said "we have all agreed to stick to our budgetary undertakings". Furthermore, Euro zone Ministers have pledged to make progress with certain structural reforms. Mr Solbes also said that there is no "interrupted balance". The European Commissioner felt "reassured by the fact that as far as Ministers are concerned, fiscal control continues to be a priority." "This is a vital commitment by them that will continue,", he stressed, suggesting that some unnamed Member States would have to take "further steps". The Commission claims that Portugal, Germany, France and Italy do not have any budgetary freedom, as their anticipated deficits this year are inconsistent with the stability pact provisions.The Italian Finance Minister, Giulio Tremoti, undertook to observe the aim of a return to budgetary balance in 2003 but stopped short of spelling out the details of what was needed to achieve this target. His German colleague Hans Eichel confirmed that growth in Germany is lower than expected, but he is hoping the situation will improve during the second half of the year, and above all starting from the end of the year. The French Finance Minister, Laurent Fabius, believes the slowdown "calls for close co-operation" between the Member States. "Dealing with long-term problems" (referring to structural problems such as the ageing of the population) "will help us settle short-term ones."Growth.As for growth, Mr Solbes said he was realistically optimistic, but agreed the latest figures show the rate of growth is slower than expected. On a quarterly basis, growth is limited to 0.5% of GDP in the first three months. He is banking on a further slowdown during the second and third quarters. However, the Commission is still looking forward to a revival during the last quarter of the year. The IMF Director General, Michael Deppler...