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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (518959)	1/3/2004 5:50:45 PM
From: Lazarus_Long	Respond to of 769670

Nor do many of the states already in the Euro zone, such as Italy. They have violated the criteria year after year after year and nothing is done. If you remember, there was quite a debate in Germany about abandoning the solid mark for the coinage of of monetary union that included Italy. They should have listened to themselves. The Brits did and aren't unhappy about it. And they are not the only ones. And your comment totally sidesteps his in any case. He was addressing the fasct that a single gov't does not still get the wage tax in a trade pact when jobs move as they do in a nation. And his argument ignores the fact that NYers were still left high and dry and out of work when the textile mills moved south. The only REAL solution to such an objection is to make each person an independent nation. eubusiness.com Brussels faces dilemma over EU budget pact 02 September 2003 The European Commission faces a growing dilemma: how to stand firm against continued violations of strict budget rules by EU heavweights France and Germany, while not endangering fragile prospects of economic recovery. France's admission that its 2003 public deficit may well reach four percent of gross domestic product -- a full percentage point above the ceiling set by the pact underpinning Europe's single currency -- is bringing the crisis to a head. "Given the fact that the French seem to have gone off the rails a bit in 2003, the euro-zone deficit will be around 3.0 percent or if not exceeding the three-percent figure," said European Commission spokesman Gerassimos Thomas, admitting that snowballing national slippages are threatening to take the whole 12-nation zone over the three-percent ceiling. French Budget Minister Alain Lambert said Tuesday that it put its policies for growth and jobs before the EU's Stability and Growth Pact, which sets the tough rules for the 12 euro-zone countries sharing Europe's single currency. "The commission will decide whether or not to impose a new recommendation on Paris after having seen the measures taken by France for 2004," said the spokesman, referring to the possibility of huge fines for continued budgetary misdemeanors. France has until October 3 to present its budgetary plans to the commission, after which the EU executive has one month whether or not to take further action. But Paris is not the only euro-zone member facing Brussels' steely gaze. Fellow heavyweight Germany -- all the more embarrassed since it was among the chief architects of the 1997 pact -- is forecasting a 3.8 percent 2003 deficit. Like France, it is planning to loosen the fiscal belt to kickstart growth. Italy is also sailing close to the stability pact wind, while Portugal, the first to breach the rules in 2001, is also edging up towards the three percent bar. For the moment, the commission is playing its cards close to the chest over how it will deal with the multiple breaches of its rules. "Brussels knows that the big countries are not going to change their budget policies" aimed at boosting growth, especially as the latest data has fueled hopes of a recovery in coming months, said Citigroup economist Jurgen Michaels. But "there will probably be a compromise" based on "a wider interpretation" of the rules, he added. In the hope of just such a compromise, Paris pledged Tuesday to reduce its structural deficits and to stabilize public spending next year. Germany meanwhile has a bit more wiggle room. "If the budget measures decided by the German government are approved by the parliament and implemented the deficit could come back below three percent in 2004," said the commission. The Bundesbank is less optimistic, forecasting that Berlin will breach the bar again next year. But the key political problem is that any loosening of the pact's rules must be approved by the smaller euro-zone countries, many of whom have -- often by painful belt-tightening -- brought their budgets into line. Those smaller countries are reluctant to let their bigger partners off the hook. "They have to finish with hypocricy and find a creative compromise acceptable to the big countries with deficits, the small countries and the commission," said Nicolas Sobczak of Goldman Sachs. Last Thursday German Chancellor Gerhard Schroeder called for an "economically reasonable application" of the pact's rules, claiming that such an interpretation would be supported by most EU countries. But two weeks before a referendum on joining the euro, Swedish Prime Minister Goeran Persson criticized Germany, France and Italy for creating the euro zone's current weak state by failing to prepare properly for their euro entry during the 1990s. "If they had behaved as Sweden, Finland the UK and others during the 1990s, preparing their economies for the downturn, we should not have had this situation today," he told the Financial Times daily in an interview.