While economics will dominate, personnel politics will also be closely watched: the ministers will try to clarify who will succeed Wim Duisenberg as head of the European Central Bank (ECB).

"The (EU) presidency will address the issue by inviting Duisenberg to stay on for at least one or two months and a maximum of six months," one source said, ahead of the two-day meeting in Athens.

On the economic front, the European Commission is expected to present two scenarios for the growth outlook, but admits that the outcome of the war will weigh heavily on prospects for recovery.

The commission's "basic scenario," based on a revival of confidence, is founded on hopes of 1 percent growth in the eurozone this year, down from its 1.8 percent forecast of late last year.

But given the "great uncertainty" in the world economy due to the Iraq war, the EU executive has also prepared an "alternative scenario" for growth.

This more pessimistic outlook, based on fears of a surge in oil prices if war drags on, fuelling inflation and undermining confidence, does not rule out a full-bown recession in Europe.

"With the war in Iraq taking longer than many had hoped, and the possibility that this is jeapordizing the economic recovery, the outlook is not good," said Jodie Saul of CIBC World Markets.

The budget strains facing EU were underlined this week when the European Commission confirmed it had launched the first step in the EU's excessive-deficit procedure against France.

France is heading for a public deficit of 3.7 percent of GDP this year and 3.6 percent in 2004, far in budget rules for the 12-member eurozone, which shares Europe's single currency.

Germany is already subject to the commission's disciplinary procedures after its public deficit breached the 3 percent of GDP ceiling set by the eurozone's Stability and Growth Pact.

The ministers will also discuss on Thursday the timetable for introducing the euro in the 10 candidate states, which are due to join the EU in May 2004.

Meanwhile ministers are expected to discuss the question of who will take over as head of the ECB, which sets fiscal policy for the eurozone.

Sources said that while the issue of a successor for to Duisenberg and executive board member Sirrka Haemaelaeinen is not on the agenda, the meeting will seek nonetheless to address it.

The EU's Greek presidency aims to take Duisenberg up on his offer to extend his mandate to ensure a smooth transition.

The leading candidate for the president is Bank of France governor Jean-Claude Trichet, but the verdict in his trial on false accounting charges is not due until June 18, just weeks before Duisenberg is due to retire on July 9.

Sources said the EU presidency and the ECB have already discussed the possibility of extending Duisenberg's mandate until a successor is chosen.

"The EU is no longer in a position to name the next ECB president before the summit in June, so it's normal that the presidency and the ECB take care of the situation," said one source.

SPACE.WIRE