au1929 wrote:The EU is it beginning to fracture?
I don't think so. I think what's happening is that Europe is in a double bind about this. On the one hand, the "stability and growth" pact never made any economic sense to begin with, and the political players all know it. On the other hand, all Euro participants have committed themselves to following these rules, flawed as they are. Therefore they must be enforced.
By running larger-than-legal deficits, France and Germany have sent two signals: First, that they place economic sense above rigid rules. They get away with this because the other governments know they are making economic sense. Second, they are sending a signal that the EU's rules don't apply unless France and Germany want them to apply -- note the similarity to George Bush's style of treating the United Nations. This is not acceptable for the other European nations, so they are giving France and Germany a few well-deserved slaps in their faces.
I don't think there's anything deeper going on, but I could be wrong of course.