European Union Stupidity Pact?

While the boisterous, albeit not always substantial, confrontation in view of the runoff vote in Greece’s municipal and regional elections monopolized the headlines of local media, another debate – of no less importance for the citizens’ daily lives – was culminating in Brussels: The European Union’s Stability and Growth Pact, one of the cornerstones of Economic and Monetary Union (EMU), is becoming the subject of growing skepticism by two of the most powerful EU nations, namely France and Germany. Notably, skepticism of the Stability Pact is shared by European Commission President Romano Prodi who expressed his opinions in his recent interviews with Skai radio station and Kathimerini. True, Europe’s monetary union without some fiscal discipline is inconceivable. And this has been the rationale behind the Stability Pact which has yielded considerable fruit and without which the launch of the euro would have been unthinkable. It is also true, however, that, from the very beginning, the Stability Pact drew strong criticism from a broad range of political and social circles which warned that its inflexible technocratic logic would, sooner or later, sacrifice growth on the altar of macroeconomic indicators. The critical voices were reinforced by the slowdown of the global and European economies, especially in the wake of the terrorist strikes in New York and Washington on September 11, 2001. Unfortunately, Europe has never seen a thorough public debate on these issues. Instead, something much simpler but less fruitful happened: Europe’s largest economies originally agreed that they would have to impose strict fiscal discipline on the smaller and economically weaker member states. However, later faced with heavy social and political pressures, these same countries then went on to rebuff their own construct as «stupid.» Their attitude fuels speculation that recent calls for a more open-minded approach to the Stability Pact reflects not a belated and, perhaps, welcome victory of politics over the economy but, rather, an opportunistic sacrifice of macroeconomic indicators on the alter of political expediency. In any case, the call for an in-depth discussion without blinders or opportunistic calculations remains on the European political agenda.