A "slightly and temporarily" toothless tiger
So, the European Union has agreed to rewrite its Stability and Growth pact, opening the door to "flexible fiscal regulations", as Brussels puts it. But wasn't the whole point of the Stability and Growth Pact to guarantee against wastrel governments whose shoddy public finances could undermine the euro? Under the new deal, the country that was one of the pact's authors and staunchest defenders is now citing the costs of reunification as an excuse for breaking the rules. With failure staring it in the face, Germany is so determined to stick to its futile eastern strategy that it is willing to upset the sacrosanct "European Project". Now, who would have thought that? According to the Financial Times, supporters of the stability pact, including the Netherlands and Austria, were given assurances that pact breakers would only be able to invoke the opt-out clause if their deficits were "slightly and temporarily" above three per cent. Does that mean 3.1 or 3.9 percent? And did the Dutch and the Austrians believe it? Let's see how the "No" vote side in Holland's referendum on the EU constitution responds.
For the British, this blatant dilution of the rules demonstrates once more the half-baked nature of the whole thing. Sceptics will have noticed, too, the arbitrary nature of the EU approach to enforcement of agreements. When Ireland and Portugal infringe by growing too rapidly or too slowly, they are swiftly ordered to change their ways; when France and Germany go unilateral, the goalposts are moved.
But maybe it is for the best that the Stability and Growth pact is mocked because it has delivered neither stability nor growth. Deep down, anyway, everyone knows that it doesn't matter.
