European finance ministers gathered in Prague on Friday addressed the current economic situation and the development on the financial markets, reflecting the results of the G20 summit that took place in London on April 2.

The attention of the world will shift to Prague this weekend, with US President Barack Obama due in town Saturday. Obama is expected to make the only public speech of his European tour near Prague Castle Sunday morning, before heading to the Congress Centre for an informal discussion with leaders from the European Union's 27 member states.

Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of 16 EU nations using the euro, termed on Friday the G20 decisions as historic, ambitious and on the right track.

European Commissioner for Economic and Monetary Affairs, Joaquin Almunia highlighted the relevance of all the most important economies of the world going in the same direction.

The European bloc's Czech presidency expressed satisfaction over the G20 leaders' decision to refrain from agreeing costly new economic stimulus packages. The G-20 pledged instead more than one trillion dollars to the IMF and other finance and trade institutions

EU finance and economic ministers commended the G20 leaders for agreeing to full regulation of financial markets, rejecting protectionism and considering sanctions against tax havens.

Still, concerns were voiced over the current drop in international trade volumes and the impacts of the recession on the labour market, according to a press release from posted on the Czech Presidency of the European Union website.

The attendants further agreed that a restoration of trust showed by economic entities, which is closely linked to improved situation in the financial sector, is of paramount importance for renewed growth. The necessity to address the banks' impaired assets and the need to tackle international accounting standards in relation to the steps taken by the United States of America, among other things, was emphasised in this context.

The finance ministers discussed the implementation of the Stability and Growth Pact (SGP). Under the provisions of the preventive arm of the SGP, euro-area Member States prepare annual stability reports and submit them to the Commission and the Council normally by December of each year. The aim is to ensure more rigorous budgetary discipline through surveillance and coordination of budgetary policies within the euro area and EU.

In particular, they focused on the excessive deficit procedure (EDP), which is triggered when a country has or plans to have a public budget deficit in excess of 3% of its GDP.

The ministers approved draft Council decisions on the existence of excessive deficit in France, Ireland, Greece and Spain. The ministers also agreed on a new Council decision and recommendation aiming to end the excessive deficit situation of the United Kingdom, in respect of which the EDP was launched in 2008.

European Central Bank President Jean-Claude Trichet was in attendence, a day after the ECB lowered its key interest rates. Trichet kicked open the door to further rate cuts, telling reporters that he could not exclude the possibilty we could in a very measured way go down from the present level.

Thursday's reduction was disappointing to many observers, given that economic data has shown the 16-nation bloc is sliding deeper into recession. The reduction took the benchmark rate to an all-time low of 1.25%.

The informal meeting of ECOFIN is to continue on Saturday, with a discussion that will tackle the reform of supervision over the EU financial market.

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