Germany and France Are Cooking the Euro Books
Luxembourg’s Prime Minister Jean-Claude Juncker is not a happy man. After slogging through a series of marathon meetings with European finance ministers Tuesday, he emerged to say that efforts to rewrite Europe’s battered rulebook were on the verge of collapse. Juncker just couldn’t squeeze enough consensus out of European Union members to come up with a new version of the much maligned Stability and Growth pact, which forbids euro-zone countries from maintaining a budget deficit in excess of 3 percent of their gross national product. «I am seriously considering the option of not changing the pact at all,» he told reporters. «I have no desire to replace a pact which works badly with a pact that gives the impression of working but that will work badly later.» He also said he had no intention of turning the pact into a «banal instrument which has no effect on budget policy.» Two of the most flagrant violators have been Europe’s economic motors — France and Germany. Both nations have pleaded extenuating circumstances, saying social reforms — and in Germany’s case, absorbing the former East Germany — have made it impossible to play by the rules.
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