The debt that dare not speak its name
Published 01/02/2012 | 05:00
• Apparently we have another new treaty which requires members of the eurozone to set up a legislative 'debt brake' and if they don't adhere to it, sanctions -- as yet undetermined -- will be automatically applied. It's not clear whether the relevant minister has to travel to Berlin to be punished or if German officials will travel to them -- at that country's expense, of course.
The 1997 Stability and Growth Pact included sanctions for countries whose budget deficit exceeded 3pc of GDP and whose national debt exceeded 60pc of GDP. But in March 2005 Germany and France pushed for a softening of the rules of the pact.
When it came to the crunch and the Prodi Commission wanted to apply the rules of the pact to hold Germany and France to account (imagine that, an Italian following the actual rules), the governments of the EU joined forces and voted against the Commission.