Stability Pact reform in ‘critical’ talks phase

Berlin and Brussels have let it be known they share similiar attitudes on the EU’s Stability Pact, as finance ministers entered talks meant to refine reform plans.

Gerhard Schroeder, the German chancellor, writes in the Financial Times that member states should be able to run bigger budget deficits without being penalised. The paper noted he’s not the only leader straining to be free of the pact’s limits in order to regain more political room for maneouvre at home. The chief monetary affairs spokesperson in Brussels even conceded there are several points that the Commission sees in exactly the same way as Berlin, but she would not elaborate on any differences ahead of what she called a critical phase in the talks. Joaquin Almunia handles the commission’s side of the negotiations over how flexible to be. Italy is most against national debt reduction moves. But there is broad agreement that countries acting responsibly with their finances should be trusted more. The leaders want a reform package ready for their consideration at a Council meeting in March.

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