Brussels, 14/07/2004 (Agence Europe) - Reactions to the decision by the Court of Justice of the European Communities (CJEC) are positive but different. Most welcome the clarifications by judges on the Stability and Growth Pact, at least in regard to application procedures and distribution of roles between the European institutions. Although some quarters have noted that the decision does not go indubitably in the direction of a fortified Commission, everyone has welcomed the acknowledgement of the need of reforming the pact and appear to be particularly pleased with this.
From a procedural point of view, the judgement goes back to the situation before the Council of 25 November 2003: with a decision being awaited on the basis of the recommendations of the then Commission. The latter has indicated that it is going to study the ruling before adding further comment or taking any measures (EUROPE yesterday p 13). The Netherlands voted against the conclusions in 2003 (with Austria, Finland and Spain) but is said to be "happy" that this judgement brings "greater clarity. Dutch finance minister, Gerrit Zalm, who chairs the Ecofin Council then indicated that he would use the following months to discussion the follow up to the Court ruling, with his colleagues.
Commission Almunia has already put his ideas forward on reform of the pact (EUROPE 25 June) and the presidency decided to discuss this at the informal Ecofin summit in September. Joaquin Almunia declared on Spanish radio on Wednesday that the pact was "more alive than ever". He also spoke to the German minister of finance Hans Eichel on the phone with both agreeing to "continue this constructive dialogue". Eichel described the Court judgement a "judgement of Solomon", as if confirmed that there was nothing automatic about the implementation of excessive deficit procedure and that on the contrary, the Council of Ministers had a significant margin for manoeuvre at their disposal. He also said that finance ministers were still masters of the excessive deficit procedure. French prime minister, Jean-Pierre Raffarin "took action" on Tuesday with regard to the Court ruling, explaining that, "this did not threaten France's budgetary orientation, which aimed to respond to the European criteria, through reform, resolute management of expenses and growth policy". Nicolas Sarkozy, the French minister of the economy interprets the decision as a "reminder that common European rules must be scrupulously followed by all" before confiding that, "this strengthens my commitment to control public spending and reduce the deficit".
In a press statement, Luxembourg prime minister, Jean-Claude Juncker was also satisfied as it confirmed that, "finance ministers had the right to refuse or approve European Commission recommendations" and bring "greater procedural clarity" to the pact, which is useful in the perspective of its updating. In a reaction to the forthcoming debate, the Austrian minister of finance, Karl Heinz Grasser, who is a stickler for keeping to the pact, indicated on Wednesday, the to he daily Handelsblatt that he was against any flexibility in the pact in recession periods, explaining that, "the pact doesn't need to be softened up. The ECB noting the judgement, insisted on the fact that , "neither the treaty nor the stability and growth pact should be modified" but "application of the Stability and Growth Pact could still be improved".
Christian Democrat MEP from Germany, Ingo Friedrich underlined that this decision was a "bitter defeat" for the red-green coalition in power. He said that in relation to the German minister of finance, Hans Eichel, "the sinner cannot be his own judge" and welcomed the fact that the Commission remained "guardian of the pact". Responding to criticism from the German opposition, Social Democrat, Klaus Hänsch, considered that the ideas describing the judgement as a "red card" or a "good smack" in the face for the German government were the reflection of a "gutter level populism". He said that "this is the decision of ministers who had been broken by Germany and France's decisions". He also said that "the role of the Commission is strengthened, which is good.
Speaking on behalf of the French delegation at the EPP-ED, Alain Lamassoure informed the LCI television channel that, "the Commission was right on procedure but Member States were right overall". Attacking the management of public accounts by the Socialist government, he supported the idea of a "squirrel's pact: economising on the nuts when its going well and eating them up in winter"