ECONOMY

EU affirms its support for Stability and Growth Pact

The European Union yesterday reiterated its commitment to the much-maligned Stability and Growth Pact, saying that any changes to be made this year will be technical in nature. «There is no issue of revising economic policy, including the stability and growth program,» Economy and Finance Minister Nikos Christodoulakis said. Greece is the current holder of the rotating EU presidency. «Only technical issues need to be amended.» The affirmation of support came a day after Pedro Solbes, EU economic and monetary affairs commissioner, said greater transparency and predictability on budgetary policy decision were needed rather than changes in the rules. «There is enough flexibility in our rules, so we certainly do not need to change our rules or legal framework. This discussion has to stop. We have to implement our rules in a consistent and transparent way and we can improve application,» he stressed. Debate over the 1997 Stability and Growth Pact arose after the largest economies in the eurozone breached or came close to breaking the 3 percent budget/GDP ceiling last year. The rumblings have become stronger in recent weeks as some countries called for a relaxation of the pact should war break out in Iraq. European Commission President Romano Prodi last week said EU leaders could come up with a new interpretation of the pact at a summit in March. Christodoulakis said any changes will be technical in nature and relate to the application of the pact. He said proposals to allow a temporary or long-term divergence from the «close to balance» requirement were not deemed advisable. On public debt, he said the finance and fiscal committee will look into a satisfactory debt-reduction strategy for heavily indebted countries with the objective of bringing debt down to 60 percent of GDP.