McCreevy heads for the racetrack to host this weekend's Ecofin meeting, writes Denis Staunton.

Punchestown is an unlikely venue for a meeting of EU finance ministers but as they consider the agenda for their two days of informal talks, many of Mr Charlie McCreevy's European colleagues may feel that the racecourse is an inspired choice.

Tomorrow's lunch will be dominated by a discussion of the race to succeed Mr Horst Koehler as managing director of the International Monetary Fund (IMF). This is a handicap event, in which a European always wins - the result of a deal with the United States under which an American candidate always heads the World Bank.

Spain's finance minister, Mr Rodrigo Rato, is the only candidate to be nominated so far, but France and Germany are expected to back Mr Jean Lemierre, who currently heads the European Bank for Reconstruction and Development. Italy's prime minister, Mr Silvio Berlusconi, has said that he has a candidate too, believed to be the European Commissioner for Competition, Mr Mario Monti.

The ministers will not necessarily choose Europe's candidate tomorrow, although they are expected to close the list of candidates before they leave Punchestown. Mr Rato's prospects were damaged by last week's decision to appoint another Spaniard, Mr Manuel Gonzales Paramo, to the executive board of the European Central Bank (ECB).

Spain's incoming Socialist government may be less enthusiastic than its predecessor in backing the conservative Mr Rato, who will be in the embarrassing position tomorrow of being present while his future is discussed.

France and Germany, who are notorious for the institutional equivalent of race-fixing, view the IMF job as part of a package of international appointments they wish to influence. Their support for a Spanish candidate for the ECB job was fuelled by a determination to establish a precedent under which the EU's biggest member-states will always be represented on the executive board. If Mr Lemierre, a Frenchman, is sent to the IMF, Berlin will seek French support for a German candidate to fill a new position of vice-president of the European Commission in charge of competitiveness.

As it happens, Mr Lemierre is universally agreed to be an excellent candidate and the US has made clear that it would welcome his appointment.

There can also be few places better than Punchestown for a discussion of another item on the ministers' agenda - standards in accounting and auditing. To get the ball rolling, Mr McCreevy might consider distributing copies of the Comptroller and Auditor General's report on the Punchestown agriculture and equestrian centre.

The European Court of Justice yesterday set a date for a hearing on the European Commission's challenge to EU finance ministers over their decision last year to allow France and Germany to ignore the rules of the Stability and Growth Pact. The pact is not due to be discussed at all, however, during this weekend's meeting.

The Economic and Monetary Affairs Commissioner, Mr Pedro Solbes, has quietly dropped plans for an overhaul of the pact, not least because the ministers have made clear that they will have nothing to do with it. Mr Solbes will leave his post later this month to become Spain's new finance minister and any review of the pact is now likely to be postponed until after a new Commission takes office in November.

Mr McCreevy's first three months in the chair of Ecofin, as the finance ministers' meetings are known, have seen no major disputes among the member-states. The Minister has been disciplined almost to the point of stiffness, successfully stifling any urge he may have to sound off in his more familiar style. He appears a little tense at press conferences, sometimes reciting the text of agreed statements in response to reporters' questions.

Some of Ecofin's decisions in recent months may have been unwise, however, notably in connection with the appointment to the ECB executive board. Appointments to the board must be made unanimously but the ministers came to what Mr McCreevy described as "a gentleman's agreement" to choose their nominee by qualified majority before formally approving the appointment unanimously.

If this procedure was questionable, its outcome was to set a precedent that can only disadvantage smaller member-states, such as Ireland.

By replacing one Spaniard on the executive board with another, the finance ministers have opened the way for Italy to nominate a successor to Mr Tommaso Padoa-Schioppa next year and for Prof Otmar Issing to be replaced by another German in 2006.

The EU's biggest member-states have intensified their efforts to gain control over European economic policy in recent months and the ECB appointment has strengthened their hand.

Much attention today will be focused on the Ecofin debut of France's new finance minister, Mr Nicolas Sarkozy, who replaces the hapless Mr Francis Mer. His country's most popular politician, Mr Sarkozy has made clear that his priority will be to boost economic growth.

It remains to be seen how Mr Sarkozy will reconcile this ambition with France's promise to keep its budget deficit down, particularly in view of his calls earlier this year for lower taxes.

The ECB's decision yesterday to leave interest rates unchanged will have disappointed a number of EU governments and the ECB president, Mr Jean-Claude Trichet, is likely to come under pressure in Punchestown to indicate that a rate cut is imminent.

The most potentially divisive item on the agenda is the Financial Perspectives, the EU's budget plan for 2007-2013, which is due to be agreed by June 2005. The Commission has proposed a budget that would amount to an average of 1.14 per cent of the EU's economic output every year.

The six net contributors to the EU budget - Germany, France, Britain, Sweden, the Netherlands and Austria - want the budget to be capped at 1 per cent of the EU's output. This would mean that an EU of 25 countries would have to make do on about the same budget as today's union of 15, a prospect poorer states view with alarm.

The ministers are unlikely to engage with the detail this weekend but will attempt to agree a timetable for negotiations before delivering an analysis of the issues to next June's EU summit in Brussels.