The Commission’s decision to turn a blind eye to the deficits of Spain and Portugal does not bode well for the future. It may yet lead to another crisis and undermine our rules-based Union.
The European Commission still has another chance to decide. Are Spain and Portugal off the hook for their fiscal imbalances? This follows a move, earlier this year, to make similar exceptions for France.
It was the decision to not apply these rules from the beginning that sowed the seeds for the sovereign debt crisis.
In 2003, Germany and France agreed that the two countries would not have to follow the rules of the Stability and Growth Pact (SGP) and decided that the sanctions mechanism should not be applied.
Other member states soon learned they didn’t have to follow the rules and five years later, when the American financial crisis hit Europe, member states were far more vulnerable than they should otherwise have been.
Do you hear the toll of bells of the past yet?
We must not risk making the same mistakes again for short-term political gain. Rules about fiscal discipline are there for a reason.
Our rules are for all of us
But my criticism is not only about economics, it’s also about politics and the fundamental workings of our Union.
When the president of the Commission Jean-Claude Juncker said France would not have to follow the rules because it was France, he undermined one of the most fundamental principles of the European Union.
The first sentence of Article two of the Treaty of the European Union says:
”The Union shall respect the equality of member states before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government.”
True, countries’ voting rights are weighted according to population size, and so is their representation in the European Parliament. But representation is one thing, being obliged to follow rules and regulations are another.
In any civilised political system, based on the rule of law, all subjects to the law should be treated equally. This principle is one of the founding pillars of modern democracy and Western political culture. Otherwise we risk undermining the credibility of our rules, crucial for the credibility of the stability of the European economy as well as the Monetary Union.
Fiscal responsibility is one of the foundations of economic growth and hence of the well-being of European citizens. That rules are followed is one of the prerequisite of a successful society.
The European Commission is obliged to be the guardian of these rules. They are certainly not an expression of Brussels – bureaucracy nor aim for austerity. It’s the other way around, austerity came from the breach of the rules. They are instead the preconditions for a prosperous and strong Europe.
The practise of shirking the rules needs to end.
Gunnar Hoekmark is leader of the Swedish EPP delegation in the European Parliament and Member of the Committee on Economic Affairs.