German Press Review: Stability Pact -- Rubber Pact

Finance Minister Hans Eichel can be smugly satisfied, Cologne’s Express wrote. He won himself some breathing space with his successful coup in Brussels regarding Germany’s budget deficit. But, the paper said, he’s actually just made things worse, since the victory comes at a high price. Germany once believed strongly in the EU's Stability and Growth Pact, which is meant to bolster the euro by requiring euro zone countries to keep their budget deficits below 3 percent. If Germany and France are allowed to break the rules without being burdened with the financial penalties the pact calls for, what incentive do other countries have to save, the paper asked. The Stability Pact has become a rubber pact.

The Stuttgarter Zeitung said the game being played by Germany and France -- Europe’s largest economies with the EU's largest deficits -- is damaging common stability policies and creating distrust among the smaller euro zone countries as well as the central European countries set to join the EU in 2004. The German-French rule-bending could heavily burden consultations on the future EU constitution, which are reaching a decisive stage.

Finance Minister Eichel’s self-satisfaction will be expensive for Germany, the Berliner Kurier wrote, because Germans will soon feel the effects of the deficit and will have to pay the accumulating interest on it. Then the tax cuts promised for next year will be of little use. Germany doesn't have a healthy budget, the paper wrote, and the truth about the financial crisis is being obscured from the public. It would be better just to start saving.

The Nürnberger Nachrichten took a slightly different view from the rest of the papers. The European Commission was right to suggest Germany make budget cuts, but, it pointed out, the decision-making lay with the finance ministers. The Stability Pact had been consciously designed by heads of state so that finance ministers -- not the Commission -- would make decisions when it came to imposing sanctions on the agreement's offenders. In light of the recent situation, however, the reliability of the pact has suffered in the eyes of the public. Many people only see that the two largest EU countries have bent the Commission to their will. The paper stressed that the public will not believe in the pact again until Germany and France get their deficits in order by 2005 as they promised.