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Tue 13 Jul, 2004 05:24 am
Quote: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 to point to what might happen next.
Since the Council's conclusions are annulled, finance ministers may have to take another decision based on the Commission recommendations that the Council illegally rejected.
However, member states are unlikely to share a single opinion on the ruling. Germany and France, which could be fined up to 10 and seven billion euro respectively, will be outraged.
But the Netherlands, which currently holds the EU presidency, has frequently called for a strict interpretation of the rules underpinning the euro and is likely to welcome the judgement.
Source
Press release, from the Eu Commission:
Quote:IP/04/897
Brussels, 13 July 2004
Commission statement on the Court of Justice ruling relating to the excessive deficit procedure
The Commission welcomes the ruling by the European Court of Justice since it confirms the essential role of the Stability and Growth Pact Regulations in the EU budgetary surveillance process. In particular, the Court ruling confirms the Commission's view as to the respective roles of the Commission and the Council in the application of the Stability and Growth Pact making thereby budgetary policy coordination more transparent and more predictable in the future.
The Commission will study carefully the full decision of the Court before making more detailed comments or proceeding in any other action. As the ruling states, the Council's conclusions of 25 November are thereby annulled. The situation prevailing at the moment is the one of the 24 November. The Council recommendations under Article 104(7) adopted for Germany and for France remain the only legal text valid. The Commission in cooperation with the Council will consider how to ensure a satisfactory resolution of the budgetary problems of these two member states within the framework of the Stability and Growth Pact.
In the Commission's view, the Court ruling also confirms what was stressed by the Intergovernmental Conference in its declaration on the SGP, namely that a rules-based system is the best guarantee for commitments to be enforced and for all Member States to be treated equally. As already announced on the occasion of the publication of the Commission Communication on the EU Public Finances in 2004, the Commission will therefore proceed in its consultations with the Council and the ECB, with the objective to formulating more specific proposals for "strengthening and clarifying the implementation of the Stability and Growth Pact" and for improving economic governance in the Union in general and the euro area in particular.
Source
Press release -
as PDF!:
Economic policy
IN THIS JUDGMENT THE COURT OF JUSTICE CLARIFIES THE POWERS OF THE COMMISSION AND THE COUNCIL RELATING TO THE EXCESSIVE DEFICIT PROCEDURE :
Judgement of the Court of Justice in Case C-27/04: Commission / Council
deleted = yes, wrong thread
I think there's a tragic conflict here. On the one hand, the European Community cannot work if its large members just decide that contractual obligations are for other nations, not for them. Seen from this perspective, the governments of Germany and France got a well-deserved black eye for breaking the stability and growth pact just years after they themselves dictated its terms.
On the other hand, Mario Monti was right: The stability and growth pact is a stupid contract. When countries are in or near a recession, as France and Germany are, it is good economic policy for them to run temporary deficits. If it wasn't for the contract breach, the two countries are doing the right thing.
The best result of this conflict I can hope for is that it will kill that hideous monstrum deceptively labelled the "Stability and Growth Pact". It stifles growth without providing any stability. But I hope Mr Schroeder and Mr. Chirac get some more well-deserved bashing before the pact finally collapses. The small coutries need to teach the governments of France and Germany that they are not going to be pushed around by the big countries.
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