Myth and reality. I will step back from the chorus of set views expressed over the recent vicissitudes of the Stability Pact, which has been buffeted back and forth in recent weeks. The three European Commissioners who criticised the abrupt nature of the Pact (President Prodi, Pascal Lamy and Mario Monti) have always said it had to be respected, particularly the 3% rule, as it clear from reading their speeches rather than selecting quotes out of context. But the broad reactions of various figures (including a handful of MEPs) and bolt from the blue headings in some of the media have misled public opinion to such an extent that Pedro Solbes and the European Central Bank had to hammer home the validity of the Pact and its flexibility. Over and above this storm in the media, there are a few undeniable facts that need stressing in that they demonstrate how far the myths (porkies?) that are bandied about clash with reality:
Positive development. You would have to be blind or distinctly perverse to miss the positive aspects of recent discussions. A debate has been launched and its outcome should help the EU's economic governance make progress by clarifying rules and practice. At the same time, the debate will stimulate the Convention's work on the institutional aspect, in other words how the Pact functions, and the role of the European Commission. The Convention can only define the principles and operation of common policies since defining the content is the task of parliaments (national and European), Community institutions and governments, each of which has been given its own responsibilities. The Treaty notes that Member States coordinate their economic policies as a matter of common interest (Article 99), and the Convention should expand this measure by considering the Commission's suggestions. But a Constitutional Treaty cannot go any further. MEPs and civil society have to understand that.
If the euro didn't exist. The few lines on the euro above deserve comment. It is exclusively due to the existence of the single currency and its rigorous management by the European Central Bank (ECB) that Member States responsible for 'slippage' have not had to pay hard cash for their budget slips. Past experience shows us that in a system of national currencies, the currencies of failing countries would have immediately been subject to a greater or lesser degree of speculation and this would have led to devaluation. Have we forgotten the "black weekends" at the Borschette Centre in Brussels, the sudden meetings of the monetary committee and the unpleasantly feverish negotiations between finance ministers with the basic economic policies of certain countries, along with their national prestige, hanging in the balance? Some of the people complaining about the ECB's interest rates today should remember their own interest rates ahead of the introduction of the euro, which would soon be repeated if the single currency didn't exist. These comments might explain various heads of state's attachment to the Stability Pact.
(F. R.)