So the Dutch Finance Minister – Gerrit Zalm – has a weblog. Not understanding too much Dutch it’s hard to make a very thorough assesment, although it does look rather austere. However, unlike Howard Dean and Wes Clark, it does appear that he is posting himself. But it is not for the fact that he has a weblog that Finance Minister Zalm is making headlines at the moment. Rather it is for some of his statements on the French government and the stability pact. According to Frans he announced last week “that he gave up trying to get the European Commission to act against France’s repeated breaching of the rules”. Now Frans understandably is scratching his head trying to determine what this might mean.
Not being particularly clued-in on Dutch political rhetoric it is hard to judge. But it is clear that this wound is open, and is not disappearing. I don’t doubt that even though many are talking of a ‘constitutional crisis’, some compromise or other will be put together. My bigger question is just how much farther down this road can you go before things do finally get serious. The Netherlands is, as I have previously suggested, the ‘odd man out’ in the euro group. You cannot keep raising the temperature a notch on each occasion before something finally gives. So what we perhaps ought to be asking ourselves, is how long have we got left before push really does come to shove? This week battle is to be joined, and according to the Financial Times:
Germany and France will on Monday night join forces in a last-ditch legal attempt to save themselves from the full impact of the EU’s budget rules…………….
German government lawyers claim it would be possible to strike a deal where Berlin and Paris agreed to take further measures if the Commission promised not to make binding policy recommendations. “The Commission must ask itself whether it wants to knowingly wreck the stability pact through an excessively rigid interpretation of the rules,” said a German government official. The legality of the move was being explored over the weekend before a two-day meeting of EU finance ministers that begins on Monday night in Brussels. Commission officials say that if the German move were successful, although illegal, it would inflict incalculable damage to the stability pact. “We have probably never been in such a serious situation,” one said.
While EU Business reminds us that it is not only Zalm who is raising the temperature:
Swedish Finance Minister Bosse Ringholm slammed France Thursday for its excessive public deficit, saying the situation Paris was in was not exceptional. “France is not in an exceptional situation, France is in a situation for which it is itself responsible,” the TT news agency quoted Ringholm as saying after a meeting of the parliament’s European affairs commission.
France faces a vote Tuesday by European Union economic and finance ministers on a European Commission recommendation that Paris cut its structural deficit by six billion euros (seven billion dollars) in 2004 in a bid to get its deficit under 3.0 percent of gross domestic product (GDP) “France is in a situation that it should be able to resolve rather easily. They could postpone (planned) tax cuts,” the Swedish finance minister said. Along with Germany, France is on course to breach the EU Stability and Growth Pact’s ceiling on public deficits — 3.0 percent of GDP — for three years running next year. Ringholm and Swedish Prime Minister Goeran Person have repeatedly criticized Paris for lax fiscal policies that have also been cited as one reason Swedes rejected the single European currency in a September 15 referendum.
Stockholm forecasts a public surplus equivalent to 0.5 percent of GDP in 2004, following a 0.2-percent surplus this year. Earlier Thursday, Dutch Finance Minister Gerrit Zalm defended the stability pact, warning of a crisis if countries flout rules for budgetary rigor contained in the 1997 agreement. “If it were the case that (France and Germany) ignored the pact and the Maastricht treaty… we will have a serious constitutional crisis,” Zalm told As finance minister Zalm pushed through highly unpopular measures such as spending cuts on healthcare, pensions and social security to meet the EU rules. “When it becomes evident that you are not complying with international agreements, it begs the question what the EU is worth,” Zalm warned.