Stability Pact ‘like Christianity’

BARCELONA (Reuters) – Nikos Christodoulakis, the Eurogroup chairman, said yesterday the Stability Pact is an essential tool for eurozone fiscal stability and that it was unthinkable to have 12 different fiscal policies. Christodoulakis, Greece’s finance minister, strongly defended the pact when asked about comments by European Commission President Romano Prodi that it was «stupid.» «I strongly believe that the Stability and Growth Pact is a very essential tool for fiscal stability and for sustaining the credibility of monetary policy,» he told reporters during a meeting of European and Mediterranean finance ministers and officials. The Greek minister, who currently chairs meetings of eurozone finance ministers, was confident the European Commission as a whole was a strong believer in the pact. However, he added there were occasionally different ways of viewing it. «The Stability and Growth Pact is sometimes like Christianity; we have the Orthodox, we have the Catholics, we have the Protestants, but we believe in the same God,» he said. The pact has come into question because Germany, France and Italy, the eurozone’s three biggest economies, are struggling to meet the 3 percent budget deficit limit for this year which it sets out. He said it was in the interest of the eurozone as a whole to have the Stability Pact, saying it was «inconceivable to me to have a unique monetary policy and 12 uncoordinated fiscal polices.» «I think… (it)… should serve as the basis for credibility of our economic policies. It’s an absolutely useful instrument and framework for establishing criteria for conducting fiscal policy.» He said he expected the Greek budget deficit to be «well within the framework provided in the pact» both this year and next.