Brussels  - European Union finance ministers Tuesday agreed to allow member states to permanently reduce VAT rates in labour- intensive sectors such as catering or cleaning, diplomats said.

The deal, brokered by the Czech presidency of the EU with the help of the European Commission, was expected to end months of wrangling about the effectiveness of such a measure.

While some member states had insisted it would help create new jobs at a time of economic crisis, others had argued it would merely result in a fall in tax revenues.

Brussels  - Eurogroup finance ministers were meeting in Brussels on Monday amid growing concerns that the European economy may get stuck in recession until
2010, prompting possible new bail-outs of troubled countries and shedding some 6 million jobs in the process.

Latest projections from the European Central Bank (ECB) suggest euro area gross domestic product (GDP) could shrink by up to 3.2 per cent this year, far more than previously expected.

GDP could either fall by 0.7 per cent or rise at the same rate in 2010, the ECB said.

Brussels - Eurogroup finance ministers were to meet in Brussels on Monday evening amid growing concerns that the European economy may get stuck in recession until 2010, shedding some 6 million jobs in the process.

Latest projections from the European Central Bank (ECB) suggest euro area gross domestic product (GDP) could shrink by up to 3.2 per cent this year, far more than previously expected.

GDP could either fall by 0.7 per cent or rise at the same rate in 2010, the ECB said.

Wellington  - The director-general of the World Trade Organisation, Pascal Lamy, has rejected the "food miles" campaign of some European farmers who say consumers should buy local produce instead of imported foods, according to a news report on Friday.

Their argument says buying food from countries like New Zealand is environmentally unfriendly because of the carbon emissions involved in transporting it to consumers over long distances.

Brussels - In a further sign of the new United States administration's desire to work with Europe, US Vice President Joe Biden is due to meet European Union and NATO officials in Brussels next week, officials said Wednesday.

Biden, who already met with several European leaders at a security conference in Munich in February, is expected to hold talks with EU officials and with NATO Secretary General Jaap de Hoop Scheffer at the alliance's headquarters on Tuesday.

Pristina - The European Union's law enforcement mission in Kosovo, the Eulex, handed out its first war crimes conviction in the former Serbian province on Wednesday, sentencing an Albanian to 17 years in prison for murder.

Gani Gasi, 59, was sentenced for shooting and killing a man and wounding three members of his family in 1998. The verdict was reached by a panel of two Eulex and one Kosovo judge.

The prosecutor was also a member of Eulex, a mission of 1,900 policemen, judges, prosecutors and customs officials deployed in late 2008 to help Kosovo along its first sovereign steps.