Juncker rebuffs Schröder's stability pact calls
HONOR MAHONY
24.01.2005 @ 09:49 CET
Jean-Claude Juncker, Luxembourg prime minister and current head of the EU, has rejected calls by the German Chancellor to waive the disciplinary procedures contained within the rules underpinning the euro, according to German daily Die Welt.
Gerhard Schröder had suggested that the so-called excessive deficit procedure may be waived if a country has the "economic potential" to get itself back below the ceiling of three percent of GDP in the middle term.
The pact is to be reformed by the EU leaders summit in March (Photo: European Commission)
This would severely narrow the powers of the European Commission over economic policy.
However, Mr Juncker told Die Welt that after the reform of the stability pact, the Commission would still have the right to start excessive deficit procedures against pact breakers.
"EU leaders and finance ministers will not become more important by forcing the Commission to its knees", said Mr Juncker.
He said that for the reform of the pact, it is important that there is more sensible financial policy in growth periods and more sensible economic policy in economic downturns.
However, according to news magazine Focus, the European Commission is likely to agree to one central demand by the German Chancellor.
Economics and monetary affairs Commissioner Joaquin Almunia told Focus "when we judge the financial state of a country, all factors play a role. Among these, I would also count the huge challenge of German unification".
Following a meeting with Mr Schröder on Friday (21 January), Mr Juncker said he was "reasonably confident" that member states would reach an agreement on reform of the euro rules by the EU summit in March.
