The European Commission will today outline to EU finance ministers its proposals to reform the Broad Economic Policy Guidelines, the EU's main instrument for co-ordinating economic policy among the member states.

The reform is aimed at ensuring that all member states embrace the priorities for economic growth outlined in the Lisbon Agenda, the EU's 10-year economic reform plan.

As euro-zone ministers met in Luxembourg last night, Irish officials were relaxed about the commission's plans, which they did not expect to lead to radical change. Minister for Finance Brian Cowen will oppose any attempt to link the reform to a proposal to introduce a consolidated tax base within the EU.

Most EU governments want to consolidate the tax base but the Government fears that it could lead to harmonised tax rates.

Last night's meeting was expected to be overshadowed by gloomy economic news that saw the commission cut its 2005 growth forecast for the euro zone to 1.6 per cent from 2 per cent.

The European Central Bank has ruled out a cut in interest rates, fearing that high oil prices could fuel inflation while dampening economic activity.

Following last month's decision by EU leaders to relax the Stability and Growth Pact, the finance ministers must agree on the legal steps to change the rules. Today, they will consider the position of Greece, which has been in breach of EU budget rules for the past four years.

Luxembourg, which holds the EU presidency, is hoping to secure a deal on the EU's next seven-year budget plan by the end of June and the ministers will today discuss the next steps.

Divisions over the budget remain deep, with the six net contributors to the EU budget - Britain, France, Germany, Austria, the Netherlands and Sweden - calling for a spending cap of 1 per cent of gross national income for the 2007-13 period.

The Commission argues that such a limited budget would render the EU unable to carry out the obligations imposed on it by national governments.