Wednesday

14th Apr 2021

Both sides claim victory in euro pact ruling

The principal actors on either side of the landmark court ruling on Tuesday (13 July) rushed to place their interpretation on the decision with both sides claiming they have come out on top.

On the face of it, the Luxembourg-based Court handed down a clear victory for Brussels by annulling the decision of finance ministers to suspend a disciplinary procedure against France and Germany for repeatedly breaching the EU's budget deficit limits.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

And the Commission was quick to welcome the ruling.

President Romano Prodi - who took the controversial decision to bring it to court - said that the ruling "confirms the Commission's view as to the respective roles of the Commission and the Council and the application of the stability and growth pact, making thereby budgetary policy co-ordination more transparent and more predictable in the future".

He added, according to the FT, "I am very, very happy".

Balanced ruling

But the ruling was not completely one-sided and there was enough in the Court's decision for member states to claim some sort of victory.

Germany - which this year will have breached the pact's rules for three consecutive years - said that the ruling gave the Council room for manoeuvre when interpreting the rules.

Describing the ruling as "wise", German finance minister Hans Eichel said, "finance ministers are and remain the masters of the excessive deficit procedure", according to German agency DPA.

He added, "We are no closer to sanctions than we were before".

However, political opponents labelled the ruling a "slap in the face" for Mr Eichel.

France - no change to budget plans

A spokesman for the French government - the other main deficit "sinner" said that the ruling "does not place France's budget policy orientation in doubt".

Dutch finance minister Gerrit Zalm - who was the strongest supporter of the Commission during the November spat with member states - also welcomed the decision, saying that the clarification provided by the court ruling was "good and positive".

However, he did describe the November decision to suspend the disciplinary procedure as a "mistake" and hinted that he felt he had been right all along. According to Dutch Radio, he said, "My personal feelings are, well, let's say it's not the worst day in my life".

What next?

Much of the sting has now been taken out of this inter-institutional battle by the relatively balanced nature of this ruling, which has allowed both sides to claim victory.

Moreover, Brussels recently softened its position on the Stability Pact saying that the rules had maybe been too strict in the past and that it would produce proposals to reform the pact that would be debated after the next Commission takes office in November.

And although in theory, the procedure leading to potentially huge fines is back in play, there is almost no chance of the fines actually being levied.

Mr Zalm said that the finance ministers would discuss the implications of the ruling after the summer break and that meeting will take place in a completely different atmosphere to the stormy clash on the night of 25 November last year.

Glossary of key euro pact terms

The language surrounding the EU's Stability and Growth Pact can be highly complex for the uninitiated. Click here for an explanation of the key terms.

Brussels wins crucial court case over euro rules

France and Germany are again facing the prospect of record fines after the European Court of Justice today overturned a decision suspending infringement procedures against them.

France and Germany to escape euro rule punishment

According to press reports, the European Commission will soon suspend disciplinary procedures against France and Germany for repeatedly breaching the rules underpinning the euro, bringing to an end a long period of uncertainty and acrimony.

Germany's budget deficit rises to 4 percent

New figures released on Tuesday show that Germany is on course to breach the EU's strict budget rules for the third year in a row. Its public deficit soared to four percent of gross domestic product in the first six months of this year.

News in Brief

  1. Michel pledges to protect von der Leyen's 'dignity' in future
  2. Libya frees UN-sanctioned human trafficker
  3. European court: jailed Turkish writer's rights violated
  4. EU set to miss 1m electric charging points by 2025 target
  5. Lavrov expects Iran nuclear deal to be saved
  6. France suspends flights from Brazil due to Covid variant
  7. Johnson & Johnson delays roll-out of vaccine in EU
  8. German government agrees nationwide pandemic law

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. Nato and US urge Russia to back off on Ukraine
  2. Future EU platform seeks to 'stay clean' of hate speech
  3. Denmark threatens Syria deportations amid EU concerns
  4. MEPs raise concerns on vaccine 'travel certificates'
  5. Will Romania be EU's Green Deal laggard?
  6. Muslims, Ramadan, and myths facing 'European civilisation'
  7. Europe & Africa - rebuilding the future
  8. How the pandemic became an EU goldmine for crime

Join EUobserver

Support quality EU news

Join us