Are the stability pact and the Lisbon strategy compatible?

This paper provides an analysis of the budgetary discipline and macroeconomic policy in the European Union.

Within a constitutional framework, the time had come to reflect on the coherence between the Lisbon strategy signed by the heads of state and government in 2000 and the Stability and Growth Pact that aims at ensuring the stability of the European currency in the short run.

The rules of the stability and growth pact are deeply called into question by those that imposed them, the same that still mention the insufficiency of economic growth, which at least has the merit of showing the hypocrisy of the “stability and growth pact”. Indeed, economic growth is the objective of the Lisbon strategy which is starting to suffer from a lack of credibility due to the absence of mechanisms to put it in practice.

Therefore, between the stability and growth pact rules, that some qualified as “stupid”, and the demand for growth (which implies employment) that benefits from an indisputable legitimacy in the public opinion, is a new “democratic deficit” that would be very dangerous to play.

The enlarged Union will need a pact of co-ordination of economic policies and a programme to ensure the financing of trans-European networks which was proposed ten years ago by the White Paper for Growth, Competitiveness and Employment now even more than before.

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