EU to bolster internal market

European Union Finance Ministers took steps yesterday to strengthen cross-border trade in financial services to help boost the bloc's sluggish economy.

But ministers also said the execution of planned measures would be key and that other steps such as wider economic reforms would be needed to revive growth.

Making trade in goods and services across the EU's national borders easier for its 450 million citizens would help boost economic growth rates as the bloc struggles with an ageing society, shrinking workforce and global competition.

Britain holds the EU presidency, and Chancellor Gordon Brown said growth was slowing and it was time to act.

"This is a sign of things changing in the European Union, that we are recognising the drivers of growth for the future - economic reform, the importance of liberalisation of markets within Europe, the sector investigations in energy and financial services, and importance of better trading relations with our partners," Mr Brown told reporters.

Measures adopted included beefing up the ability of banks to withstand market shocks and improving the scrutiny of firms, both aimed at increasing investor confidence.

Finance Ministers also backed the executive European Commission's plans to encourage workers to put money into funds across the EU for their pensions.

"The emphasis... is now on enforcement and moving forward with implementation and specific outcomes," Mr Brown said.

Others also voiced the need to follow through on decisions.

"Concerning the improvement of the internal market, I think all of us agree. The problem is the practical application is not always easy," Spanish Finance Minister Pedro Solbes said.

"We have to do everything we can for the internal market ... It's one of the ways to help boost growth - it is not the only one, but it is a good way," the former EU economic affairs commissioner told reporters.

Ministers discusssed initial results of probes by the Commission into the market for insurance, retail banking and utilities to identify obstacles to Europe-wide competition, a move welcomed by Dutch Finance Minister Gerrit Zalm.

"I think there are still some barriers... There should be a level playing field in Europe also for takeovers and mergers," Mr Zalm told reporters in an apparent reference to a recent battle by Spanish and Dutch banks to buy Italian banks.

Cutting red tape was also a key priority. Mr Brown urged the Commission to find and remove legislation that is not delivering any benefits for Europe's financial services.

The first set of rules adopted yesterday seeks to avoid bookkeeping scandals such as those involving Dutch retailer Ahold and Italian food group Parmalat.

The rules lay down minimum requirements for auditing company accounts in a bid to avoid company fraud, and include provisions such as a demand for auditing firms to change the person who handles the audit of a company every seven years.