Relations between large and small states in the European Union are mediated by the European Commission, an independent institution which initiates legislation and acts as guardian of the treaties. From the point of view of the smaller states the Commission's role has been a crucial guarantee that the greater power of the large states will be constrained by an equal obligation to respect legal rules.
The decision this week by the Ecofin council of ministers to reject the Commission's recommendation that Germany be warned about its budget deficit is a disturbing indication that this independent role cannot be taken for granted when it affects the interests of a large state in an election year.
Instead of an explicit warning to Germany the council decided unanimously to accept assurances that its government will endeavour to keep its budget deficit within three per cent of GDP. Berlin has undertaken to achieve approximate budgetary balance by 2004. On that basis there was a stiff-lipped consensus among representatives of the Ecofin council, the Commission and the European Central Bank that the basic credibility of the Stability and Growth Pact which lays down these rules has been preserved. But many independent economists and observers discern a blow to the Commission, potentially damaging the euro.
The Minister for Finance, Mr McCreevy, does not see it this way. He did not join ministers from the Netherlands, Belgium, Austria and Finland who resisted the strong German lobby (supported by Britain and France) against the Commission warning. They argued that, after last year's reprimand delivered to Ireland for what the Commission said was a inflationary budget, the same rules should be applied to the EU's largest member-state with equal rigour. Mr McCreevy disagreed, saying two wrongs never make a right and that it is realistic to expect large states will fight for their interests.
This argument is sustainable only if the particular role of the Commission in policing the Stability and Growth Pact is disregarded. Effectively Mr McCreevy asserted Ireland's complete sovereignty over its budgetary policy in resisting last year's reprimand, despite having agreed to be bound by the rules. In doing so he has, wittingly or unwittingly, helped to undermine the Commission's authority. That is a dangerous course for a State which must rely on the Commission's strength to protect the overall interests of smaller EU members. It reinforces a trend in which the Commission has lost authority in the face of pressure from large states which resent its powers.
As Ireland considers what to do about the Nice Treaty and prepares, with its present and future EU partners, to debate integration policy in the Convention on the Future of Europe from the end of this month, it is vital that proper attention be paid to how the Commission's role at the core of an enlarged Union can be strengthened. Mr John Bruton TD has argued convincingly that its president should be directly elected. Together with Mr Proinsias de Rossa TD, Mr Bruton will represent the Oireachtas and Mr Ray McSharry represent the Government on the Convention. It is a strong team - and necessarily so, given the profoundly important issues at stake.