Let us try, as far as possible, to take a more serene look at the ups and downs of the Stability Pact and its application by ignoring the sometimes excessive and unpleasant polemic which, especially in Italy, has accompanied the latest European Commission initiatives in this connection (see our bulletin of 8 April, pages 8 and on). It is obvious that the current Commission must apply the texts in force, especially when it comes to budgetary deficit, texts that have been defined by the Council and firmly sought after by Member States that today find it difficult to uphold them. The Commission was, moreover, the first to explicitly say that these texts are too inflexible and that their application must be made less rigid (the declarations by the Commission president in this respect had caused quite a stir). However, until they are reviewed, it can only apply them as they are, with the responsibility of the final decisions being up to the Council.
State of reflections. Before the last Commission initiatives and the disturbance that they caused, the informal meeting of Economic and Finance Ministers in Punchestown (see pages 8 and on in our bulletin of 6 April) and various declarations and interviews over the same days have provided us with quite a precise indication of the state of reflections on the Pact and on its review. Above all:
1. Pedro Solbes confirmed that the current Commission will not be able to present the proposal envisaged (and announced) on review of the Pact. The announcement of a document had, last January, been icily received by the Ecofin Council. Indepth analyses of its services had defined a number of guidelines or hypotheses (see above all this column of 24 January) which naturally remain valid as a basis for reflection for the Commission that is to take up its duties in November. According to the French press, Paris and Berlin called explicitly upon the current Commission not to put any proposal forward. The fact that Mr Solbes is soon to be Spanish Minister for the Economy and Finance, and therefore a member of the Ecofin Council, may have helped to convince him that any initiative should be stayed.
2. A number of Ministers pointed out they have already begun informal discussions, which will continue. Hans Eichel (Germany) felt one should go beyond legal discussions in order to tackle the fundamental economic aspect, which is: How, in concrete terms, can growth be promoted? The idea of not amending the Pact itself but simply its implementation was taken up by ECB President Jean-Claude Trichet, and seems to have the support of a number of Ministers. Others, however, are said to be thinking of recasting the Pact itself in earnest, stressing that it cannot be applied as it is, as facts prove, for countries representing the essential part of the euro zone economy.
3. Jean-Claude Juncker, Prime Minister and Finance Minister for Luxembourg, was far more forthcoming and explicit than his colleagues, setting out his views in an interview (Le Monde of 3 April) and in declarations made in Lisbon. The result is: a) revision timetable. Mr Juncker considers that several Member States must be "more presentable from the budgetary point of view" (according to Le Monde, he explicitly cited France and Germany) so that it is possible to discuss amendments to the Pact. But we can begin to think about it, and Mr Juncker said: "Those who respect the Pact must take the lead and open the debate. I propose to ensure that the Pact is refashioned during the Luxembourg's Presidency of the Council, during the first half of 2005". (Mr Juncker is certainly not forgetting the need to wait, before acting, for the response by the Court of Justice to the Commission's appeal); b) guidelines for revision. The "Pact must be more flexible in economic slump periods and stricter during a boom period. As soon as growth picks up, the States must first of all reduce their debt and their deficits, in order to have a greater margin of manoeuvre during slow periods". This, he said, means that the governments will soon not have much elbow room. He considers that the revised Pact will take effect during a boom period, when the governments will have to commit themselves with resolve to reducing the annual deficit and global indebtedness.
Coordination also. What about the coordination of economic policies? According to Mr Juncker, "the simplest mind would want to bring together the person whose only concern is to uphold Community interests and the person who ensures national sensitivities are respected, namely the Commissioner for Economic Affairs and the President of the Euro Group". This is the only way to come out of the "murky debate" in which, each time that the Commission proposes something, it is told to mind its own business, and each time that a State acts on its own, it is called to Community order. We must act as "the Union is lacking in economic governance" and the Lisbon Strategy is being "called for" rather than "delivered". (F.R.)