European Union finance ministers will today consider sending a formal warning to Italy over its budget deficit when the Minister for Finance, Mr McCreevy, chairs the first meeting of the Council of Ministers since 10 new countries joined the EU.
The European Commission has recommended issuing an "early warning" to Italy, predicting that Rome's budget deficit will reach 3.2 per cent this year and 4 per cent in 2005.
Euro-zone finance ministers were due to discuss the issue last night and Irish presidency officials played down the prospect of a vote to censure Italy today.
Italy's European affairs minister, Mr Rocco Buttiglione, said yesterday that his government was ready to take steps to reduce the budget deficit and suggested that the EU finance ministers' meeting, known as Ecofin, should postpone action against Italy.
"I have already advised the Ecofin not to be in too much of a hurry. Some friends are now telling me that it looks like they will act on this advice.
"The situation is so fluid that it would be easy to see an early warning as an act of prejudice," he said.
Germany and France, which are in breach of EU budget rules, avoided formal sanctions last year, but officials say Italy's case is different because of its unusually high level of public debt.
The finance ministers are today expected to give Portugal, which has been reprimanded for its deficit, a clean bill of budgetary health.
The ministers are also expected to agree on a Transparency Directive that would oblige securities issuers to give more information to investors.
Under the directive, investors will receive interim management statements from share issuers that do not publish quarterly reports and will get half-yearly financial reports from issuers of new bonds.
All securities issuers will have to provide annual financial reports within four months after the end of their financial year.
Although the ministers are likely to reach an agreement on the directive today, it will not be approved formally until later this year because of the delay caused by translating it into the EU's 20 official languages.
Mr McCreevy yesterday expressed confidence that today's meeting would be a success.
"This will be an historic meeting. It will mark the first implementation at the level of the Council of Ministers of the enlargement that our states and peoples celebrated on May 1st.
"I am particularly pleased that these momentous developments are taking place during the Irish Presidency," Mr McCreevy said.
