EU officials insisted today that giving France more time to avoid punishment for overspending did not weaken budget rules underpinning the euro, despite warnings that they were sending the wrong signal on fiscal discipline.
"We serve the cause of credibility most when we are able to reach a common position," said German Finance Minister Hans Eichel, who led the drive at an EU meeting in Brussels to postpone action against France for not meeting budget-cutting obligations.
Finance ministers decided to put off a decision until their next meeting, November 25th, after French Finance Minister Francis Mer promised to come up with additional, as yet unspecified, budget cuts.
"Three weeks later is probably not a long period of time," said EU Commissioner Pedro Solbes, after losing his push for a decision today. Mr Eichel, who conceded that Germany's worsening budget deficit was likely to land him in the hot seat next, insisted that sanctions and strict budgetary tutelage called for in the "stability and growth pact" were intended to be used only to prod the recalcitrant.
"When member states co-operate, what do we need this procedure for?" he asked. But the extension was criticised by a handful of smaller countries angry at what they consider special treatment for the eurozone's big powers, France and Germany.
"Each country that did its homework ... is paying the bill for the policies of France and Germany," said Austrian Finance Minister Karl Heinz Grasser. He blamed their poor economic performance for lower growth and higher unemployment across the EU.
European Parliament President Mr Pat Cox said that while he recognised the need for "pragmatism over dogmatism," infighting between EU institutions over how to proceed had put the stability pact in the "casualty ward for treatment."
PA