Free Republic

Brussels has warned Italy about potential reprisals for its rising deficit, suggesting Rome had previously under-reported its real accounts. Economic Affairs commissioner Joaquin Almunia said the Commission would probably launch a formal procedure against Italy by the end of June. Speaking at an EU finance ministers' meeting in Luxembourg, Mr Almunia suggested the action would follow the newly revised stability and growth pact. The new rules underpinning euro membership are seen as less strict by some observers, but the deficit ceiling for euro zone countries remains at three per cent of GDP. Brussels has rejected official Italian reports about the...

EUOBSERVER / BRUSSELS – After months of complex and occasionally acrimonious debate, EU finance ministers have reached a deal on the reform of a key plank of the union’s economic policy. An agreement was reached on how to reform the EU's infamous Stability and Growth Pact - the set of rules underpinning the euro – after 12 hours of emergency talks beginning on Sunday (20 March) afternoon. Ministers will now draw up a report for EU leaders, who will rubber stamp the deal at a summit tomorrow (22 March). But Jean-Claude Juncker, Luxembourg’s Prime Minister, who doubles as his country’s...

France and Germany want to review the European stability pact, which places limits on the budget deficit and the national debt of participating countries. German Chancellor Gerhard Schröder and French President Jacques Chirac say the stability pact puts the EU member states in a financial straightjacket and so retards economic growth. Germany and France are among those countries unable to meet the pact's demands. The two government leaders make their plea at a time when the EU finance ministers are meeting in Brussels to discuss the stability pact. It is not clear if the ministers will be able to agree...

Court decision reveals EU power vacuum to be filled by the EU Constitution “Today’s decision by the European Court of Justice reveals the power vacuum at the heart of the European Union’s aspirations”, - says Professor Tim Congdon CBE, author of the Bruges Group pamphlet, Will the EU’s Constitution Rescue its Currency?, published today. The Court has ruled that it is the Council that is in charge of enforcing the Stability and Growth Pact. But decisions in the Council are taken by QMV (qualified majority vote). This will inevitably mean that delinquent member states can avoid penalties. The Court has...

EUOBSERVER/ LUXEMBOURG- The European Commission has scored a major victory over EU member states as the European Court of Justice annulled the decision of the Council to suspend a disciplinary procedure against France and Germany for repeatedly breaking the euro rules. In a short ruling, read out in Luxembourg, the Court said today (13 July) it "annulled the conclusions adopted by the Council in which the Council held the excessive deficit procedures in abeyance". This represents a landmark victory for the Brussels executive and affirms its role as the supervisor of EU economic policy. But there are few legal precedents...

EUOBSERVER / BRUSSELS - The European Court of Justice in Luxembourg will on Tuesday (13 July) hand down what may be the most significant ruling in its 46 year history. The case may not sound like much (Judgement C-27/04 Commission v Council), but at stake is who is in control of the EU economy - Brussels or member states. The European Commission took the Council of member states to court over its decision in November to suspend disciplinary procedures against France and Germany for repeatedly breaking EU economic rules. Brussels had recommended that France and Germany take measures to bring...

The European Commission has warned Germany that it could face the imposition of radical restrictions on its domestic fiscal policymaking as early as next year if it looks set to exceed the stability pact's deficit limit in 2004. "If Germany breaches the stability pact's 3 per cent ceiling next year, we will present [the] ecofin [group of ministers] with a new recommendation. It is our duty," said Pedro Solbes, the European Unions's monetary affairs commissioner in an interview with FT Deutschland. Mr Solbes' warning puts greater pressure on the German government to bring its fiscal system under control. Mr Solbes...