Strengthening Constitutional Self-Government

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France puts Euro pact in jeopardy

To stay on France for another minute, note this piece out of London which claims that France "is about to break another of the cardinal rules of the euro stability pact - allowing its accumulated national debt to exceed the limit of 60 per cent of GNP imposed on euroland members.

Since France and Germany are already breaching the ceiling on annual deficits (3 per cent of GNP), the euro stability pact risks looking like a fiscal dead letter by the end of this year."

While noting the bias (against tax cuts, French and otherwise) in the article, you can’t help notice the passing mention that the French have not cut spending. The article concludes: "France and Germany, the Continent’s economic heavyweights, are now - in terms of the Euroland budgetary rules - driving the wrong way down the motorway. While most euroland countries made wrenching efforts to reduce debt in line with single currency guidelines in the past decade, France and Germany (the two countries most responsible for creating the euro) have increased their national debt rapidly. Germany’s accumulated debt has also risen well beyond the 60 per cent of GDP ceiling in the last year."

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