” “Revising the stability pact? ” “

The European Commission has recommended the Ecofin Council to implement its early warning procedure in relation both to Germany and Portugal. The measure adopted by the EU Executive is due to the excessive growth of public debt in the two countries in question, beyond the ceilings set by their budget forecasts. Though without yet incurring any official warning, France, Italy and Spain also risk – according to Brussels – failing to achieve the medium-term objective. The ball now passes to the Ecofin Council, which is due to issue its own ruling on 12 February. The early warning requested by the Commission has provoked a series of arguments and debates on whether the rules of the Stability Pact should or should not be revised. Various views on the matter are reported below. “We don’t want to change the Pact, we want a stable Euro, as stable as was the Deutschmark”. The view is expressed by Maria Luise Argiles, economic representative of the delegation of Saxony to the EU, who naturally places the emphasis on the case of Germany. “Germany’s fiscal policy – she says – is excellent; the Commission itself has always approved the federal programmes. The problem perhaps consists in Germany’s internal conflict: Berlin accuses the Länder and the cities of spending too much, while the latter deplore the lack of resources and the excessive dependence on the Federal Republic. The unfavourable international business cycle is also causing a reduction in tax receipts. Nonetheless the reasons that have led the Commission to mounting its attack on Germany remain largely incomprehensible”. Also taken aback by the warning to Germany is Rocco Tanzilli, a senior executive in the Administration of the Commission. “The Executive – he says – has assumed a very hardline position. But I have strong doubts about it: Ecofin will request a qualified majority vote to pass the warning, and that will never happen because Germany represents almost 30% of the EU budget and will not have any trouble in finding the necessary allies”. Dino Vierin, president of Italy’s autonomous Valle d’Aosta Region believes that “Maastricht should not be revised. We have a need for fixed signposts that indicate the right road to follow”. And the economist Eleni Iniotaki adds: “By abandoning the Maastricht parameters we would risk creating a negative precedent with serious consequences”. “It should be said, however – he adds – that the existing criteria concern more the financial side and not the living standards of citizens, their employment situation, or also the level of the quality of education. That is an error that would need to be corrected. Convinced of the need to revise the system is also Franco Campoli, administrator in the Commission’s General Directorate for Enterprises. “Europe ought to permit States margins of debt higher that those currently prescribed: running up debts in Europe today means investing”.