Airstrip One

Euronitis - 30th November 2002, 20.25

Last week, the newspapers were reporting that the European Commission would announce reforms to the Growth and Stability Pact. Eurospin would have had us believe that the changes would be firm enough to prevent the continued contempt that Germany and France showed the Commission.

However, the actual implementation of the Pact proposed to relax the tight rules currently governing the public sector deficits that members of the European Union could run by allowing extra expenditure for investment in recession. This small opening would give states carte blanche to return to deficit spending by using the standard excuse of 'skoolzanhospitalz'.

The losers were Belgium, Italy and Greece whose high debt levels were targeted for reduction and whose level in the EU pecking order was confirmed. These moves were a sleight of hand by the Commission which understood that the credibility of the Pact was in danger if France and Germany remained in breach so it blinked and moved the goalposts. Instead of concentrating on deficits, it would shift its focus to debt levels, an area of the Pact's implementation that it had previously ignored. Another proof, as if we need any more, of how political the Euro really is.