Stability Pact court case: Commission wins small but important victory

In a statement, the Commission welcomed the ruling in that it "confirms the Commission’s view as to the respective roles of the Commission and the Council in the application of the Stability and Growth Pact making thereby budgetary policy coordination more transparent and more predictable in the future". Commission President Romano Prodi welcomed the ruling saying that "it confirms the central role of the Stability and Growth Pact regulations in the European budgetary surveillance process.”

The Council welcomed the clarification rendered on the interpretation of both the provisions of the Treaty on the excessive deficit procedure (Article 104) and the Stability and Growth Pact, clarifying the respective roles of the Commission and the Council. As regards the latter finance minister noted with satisfaction a passage of the ruling that read: "Responsibility for making the member states observe budgetary discipline lies essentially with the Council."

The Council however said it would closely examine the implications of the court’s decision for the application of the pact’s provisions and proposals for strengthening and clarifying the implementation of the pact as part of prospective discussions this Autumn. It also noted that "France and Germany have undertaken firm commitments to reduce the budget deficit as set out in the Conclusions of 25 November and have taken steps to implement those commitments; and expects them to remain fully engaged to fulfilling the commitments set out therein".

The EPP-ED spokesperson on economic and monetary affairs, Austrian MEP Othmar Karas, was also upbeat about the judgement, commenting that "this trend-setting ruling clarifies, that the Council took too many liberties. The attempt to reduce Europe to the Council alone has collapsed today". He went on to say that "the Commission has demonstrated that they are not to be blackmailed. Now the Council cannot and must not go back to normal. They now have to make a decision compliant with the rule of law and the treaties of the European Union", concluded Karas.

ELDR leader Graham Watson said it was "a bad day for pact breakers". His interpretation was that "the European Court of Justice has clearly said that European Member States should not unilaterally depart from the rules that they make for themselves. By refusing to honour their own rules on the Stability Pact, finance ministers broke European law. We cannot have a Europe in which the rules count for the small but not the large. The price we risk paying when large Member States flout the rules is bigger bullies and weaker European law for all of us. The new European Commission must refashion a pact that is every bit as committed to fiscal discipline and controlled public spending but much less vulnerable to political abuse."