16/11/2004 11:47:17 am
Never Ending Story. At Today?s meeting in the Ecofin Council, one topic of discussion will - as usual - be the growth ans stability pact. It has been revealed that Greece, due to poor statistics, actually has breached the deficit ceiling of 3 % every year since 1998. Thus, the discussion about the pact continues. Now, what is wrong here is the formal procedure; they have imposed a rule which they don?t follow. And that is the kind of problem you get when the guardians of the rule are the same as the ones supposed to follow it. That should have been separated from the start, with the pact in the Treaty or similar. What is not wrong, however, is to change the content of the pact. First of all, the pact has never been as important as its space in the media suggests. The US have never had such a pact and the dollar works fine since hundreds of years. But the point is that the deficit limit of 3 % is a shortsighted and rigid measure. In the long run, the problems for the eurozone will be a consequence of big government and demographics. Thorough reforms are needed. A pact within the eurozone should mainly focus long-term government debt, not short term deficit. That is something for the heads of EU governments to condsider.