Brussels, 11/02/2003 (Agence Europe) - Commissioner Pedro Solbes declared on Tuesday that the triggering of a war in Iraq could be considered as an "exceptional circumstance" in relation to the Dtability and Growth Pact. Asked to say whether a war could be regarded as an exceptional circumstance for deficits, Mr. Solbes replied to Reuters: "if war is not an exceptional circumstance, then I wonder what an exceptional circumstance is… My opinion is that war contains within itself sufficient elements for a debate to be initiated". The Stability and Growth Pact comprises a clause that, in exceptional circumstances, allows them to avoid the automatic triggering of early warning procedures and sanctions should the public deficit exceed the 3% of GDP limit. According to that clause, a deficit in excess of 3% of GDP will be considered as temporary and exceptional if it results from an event outside the state in question's control of the result of a steep economic slowdown.
Paris and Bonn deny any attempt to soften the Pact
To put an end to certain rumours, the French Ministry of the Economy and Finance declared that there was no special initiative at European level aimed at softening the Budgetary Stability Pact in case of war in Iraq. The German Finance Ministry also declared that there was no question of easing the budgetary rules at EU level, while implicitly confirming that thought had to be given to how to adapt budgetary policy to low growth.