Ever since the European Union’s notorious Stability and Growth Pact was first proposed, it has met with fierce resistance from a minority of European elites. Critics said the pact, designed to keep the euro stable, would choke off the economies of the old Continent; and developments appear to have vindicated many of their concerns. As ever, no policy seems capable of promoting one goal without undermining another. It was no coincidence that while “stability” was kept in the title, “growth” was gradually wiped out.

For some time now, and under pressure from economic realities, the pact has come under fire from its former champions. The threat of recession looming over European economies as well as rising social pressures have prompted changes in the economic policy of many EU member states. Heavyweights France and Germany are spearheading the reform campaign, as both have breached the deficit ceilings. Paris and Berlin realize that an economic upturn is impossible without bending the currently iron-clad rules.

The question is not purely fiscal, nor does it just concern a few weak economies. It is common knowledge that the European economy is losing ground vis-a-vis the US. The Europeans essentially bar themselves from boosting spending at times of recession in order to jump-start their economies.

Despite pressures to put more flexibility in the pact during recent talks between eurozone finance ministers, it’s very unlikely that the EU will change the key limits on national budget deficits to 3 percent of output and a debt of no more than 60 percent of GDP. However, the next summit on March 20 is expected to take some steps in that direction.

The Franco-German axis is trying to introduce political criteria into an assessment that has so far been the exclusive prerogative of technocrats. More specifically, it is promoting the idea that any violation must be examined and judged by the Council of Ministers (consisting of member state representatives) and not by the European Commission.

The debate over reforming Europe’s fiscal rule book will obviously ease political pressure on Greece to meet the various euro targets. In any case, Greece must adhere to the pact’s rules as fiscal imbalances will undermine its real economy.