The weekend meeting of European Union finance ministers in Liege produced yet another downward revision in EU growth expectations for this year but also documented considerable confidence that conditions are in place for recovery.

It was Pedro Solbes, the commissioner for economic and monetary affairs, who predicted that growth this year would now be "clearly below 2 per cent" for the eurozone and entire EU after the terrorist attacks on the US. But he also said "the risks remain manageable" and Europe's starting point was "better than any other developed economy".

At the talks progressed, it became clear that virtually all EU countries wanted to continue their stability oriented policies of budget consolidation, while trying to inject mo re vigour into programmes for structural economic reform.

The ministers and Commission are pinning their hopes on the European consumer following recent falls in inflation, taxes and interest rates. "A series of negative factors were beginning to disappear. The fundamentals before September were better than they appeared in the Spring," said Laurent Fabius, the French finance minister.

Mr Fabius was the only minister to seek significant increased flexibility in the EU's stability and growth pact, which limits budget deficits to protect the euro. He supported full use of the so-called automatic stabilisers, by which tax revenues fall and public spending increases during an economic downturn. The Commission, by contrast, says the stabilisers should only be used in part by France, Germany, Italy and Portugal because they have failed to bring their budgets close to balance or surplus.

The Liege talks appeared on Friday to mark a setback for France when the ministers restated "their commitment to the framework, rules and full implementation of the Stability and Growth Pact". But just a few hours later, EU heads of government in Brussels declared without any qualification that "efforts made to consolidate public finances have provided the necessary room for manoeuvre to enable automatic stabilisers to come into play". The debate about how precisely to interpret the stability pact and the use of automatic stabilisers is therefore set to rumble on.

Although the aftermath of the terrorist attacks dominated the weekend talks, the ministers also tackled various tax issues.

Frits Bolkestein, the EU internal market commissioner, announced an apparent breakthrough in the long running saga over whether dependent territories of the Netherlands and UK, such as the Channel Islands, would be brought into EU plans to tax interest on savings. After talks with Dawn Primarolo, a British junior finance minister, and Gerrit Zalm, the Dutch minister, Mr Bolkestein said he was told the territories would follow the EU rules when they were introduced in the union.

Despite no trace of enthusiasm among ministers, the controversial Tobin tax on short term financial transactions appears destined to stay on the EU policy agenda. Didier Reynders, the Belgian finance minister and host of the weekend meeting, proposed the tax should be analysed by the European Commission in a report on globalisation for discussion by ministers in December.

Mr Reynders also said Belgium, holder of the EU presidency, would push for a decision at December's EU summit in Laeken on long stalled proposals for rules setting a minimum level of energy taxation, which have been blocked by Spain.

He said Belgium would seek a decision from the EU leaders and in the absence of agreement would propose that fewer than all member states go ahead with the plans under an "enhanced cooperation" procedure.