The Commission should beware of litigation against the council

Written by Andrew Duff MEP and published in EUobserver.com on Wed 14th Jan 2004

The Commission's decision to pursue France and Germany in the Court of Justice over their failure to observe the Stability and Growth Pact may not be a wise one. However infuriated the Commission might be at the arrogance of the French and German finance ministers, the blame for the collapse of the Pact has to be more widely shared. Even the Commission cannot escape entirely: who was it who, in a famously unguarded moment, called the Pact 'stupid'? Nor was the Commission united in its condemnation of Paris and Berlin: one understands the reluctance of the French and German Commissioners to openly support litigation against, in effect, their own governments' economic performance. Predictably, too, the two British Commissioners seem to have preferred a pragmatic way out.

The Commission court action against the Council illustrates beyond doubt that the system of governing Economic and Monetary Union as devised by the Treaty of Maastricht and embellished by the Treaty of Amsterdam is not working well. The reaction of the financial markets to the re-statement of the fairly obvious may not be dramatic. The political consequences of the breakdown in the working relationship between the Commission and the governments of the two most powerful member states are much more serious.

The key question arising from the abuse of the Stability Pact by France and Germany is how to restore the political authority of the Commission in economic and monetary affairs. Litigation by itself is certainly not the answer. For one thing, the grounds on which the Commission are taking its stand are somewhat shaky. The Commission is claiming that the Council failed to follow the correct procedures laid down for rejecting a Commission recommendation for a decision under Article 104(8) of the Treaty. What happened at the critical meeting on 25 November 2003 was that the Council, acting by QMV, tried and failed to take the decision according to the Treaty procedure. Having failed, the ministers, while accepting the Commission's economic analysis, nevertheless decided to modify the Commission's judgement, articulated in its formal recommendation, that no effective action had been taken to correct the excessive deficits existing in both France and Germany.

The Council's conclusions of 25 November are not legally binding on France and Germany with the same force as that of an official, justiciable decision. But they are nevertheless serious political commitments. The Court has shown itself understandably reluctant in the past to over-turn the validity of Council conclusions, especially when, as in this case, the Council has decided to continue with the excessive deficit procedure should France and Germany fail to act in accordance with the political promises they made.

Even a Court of Justice ruling in the Commission's favour will not settle the issue, because the ineluctable next step - the imposition of large fines - will be bound to be even more hotly contested by Paris and Berlin.

Secondly, although the correct procedure may not indeed have been followed by the Council, everyone knows that this is a political rather then a procedural dispute, and the Court will probably try to side-step, if not dismiss the Commission's application on those grounds. We can be certain that the Court will not satisfy those who want it to castigate the Council's economic or political behaviour.

Let us hope that the Commission in litigious mood will not complicate the Irish presidency's drive to achieve an overall political agreement on the new Constitution. To the wider public, the sight of institutional scrapping in Brussels will hardly be edifying.