EU finmins to firm up pledge for 2011 fiscal exit

The European Commission, the European Union's executive arm, said on Tuesday that the economy of the 27-nation bloc, as well as of the 16 countries using the euro, would expand in 2010 and growth would accelerate in 2011.

Such a forecast of self-sustaining and strengthening growth was the condition set by EU finance ministers in October and backed by EU leaders last week, for starting budget deficit cuts of more than 0.5 percent annually in all EU states.

"I expect the ministers will interpret the forecasts as meeting the criteria of the previous Ecofin conclusions," said one euro zone source involved in the preparation of the meeting.

Firming up the pledge would appear to put the Europeans in the vanguard -- at least in terms of rhetoric -- of moves to rein in the huge stimulus given to the world economy since the financial crisis erupted last year.

Britain and the United States, in contrast, have focussed on the need to stay the course.

Chancellor Alistair Darling, speaking ahead of a meeting with G20 counterparts here, stressed the need for continued stimulus rather than withdrawal.

Euro zone finance ministers, called the Eurogroup, meet on Monday to discuss the Commission's forecasts together with European Central Bank President Jean-Claude Trichet.

The Commission said the euro zone and the 27-nation EU would grow 0.7 percent next year and 1.5 and 1.6 percent respectively in 2011.

"I think there will be a more affirmative message from the ministers that the current forecasts show we should start the exit in 2011," a second euro zone source involved in the preparation of the meeting said.