'Little Support' For Move To Seek Clarification On Deficits

by Ulrika Lomas, for LawAndTax-News.com, Brussels

22 January 2004

Speaking on behalf of the EU's Council of Ministers earlier this week, Irish Finance Minister, Charlie McCreevy revealed that, unsurprisingly, euro-zone ministers are lukewarm at best over the European Commission's decision to seek legal clarification on whether action should be taken against France and Germany over their spiralling budget deficits.

The Commission had recommended that the two eurozone founding members, who helped to create the Stability and Growth Pact, should be fined for breaking the terms of the Pact by allowing their budget deficits to breach the 3% of GDP limit.

However, the Council of Ministers brushed this suggestion aside, voting instead to give the two countries a year's grace. This means that France and Germany will also be permitted deficits higher than the 3% limit stipulated by the Stability and Growth Pact in 2004.

"There was little support among ministers for the Commission's decision to seek a ruling at the European Court of Justice," Mr McCreevy announced following the group's monthly meeting on Monday.

Economic and Monetary Affairs Commissioner, Pedro Solbes confirmed the lack of enthusiasm for the EC's move, explaining that:

"The comments reflected the substantive position we already know from certain member states - those who feel it was not necessary, those who feel that cooperation is more important than legal clarification as opposed to those who feel it is useful to obtain a clarification on a procedure."

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