Public Affairs Networking
Greece let off the Troika’s Leash

Le Monde’s Cécile Ducourtieux comments on the European Commission’s announcement before the European Parliament on Tuesday that it is willing to grant more flexibility to member states. What was pledged several times in the past is now official, says Ducourtieux. It appears that the priority is no longer budgetary discipline, but reforms and investment in order to boost growth and create jobs.

The EC’s decision to ease budgetary rules for EU member states is generally welcomed by Belgian media, which stress the need for a more intelligent approach to the Stability and Growth Pact. The investment clause is considered as a gift to Matteo Renzi, Le Monde claims, but the newspaper concludes that France will not benefit from it, because it has been in deficit since 2008. France could benefit from more time to reach the 3% target, but in exchange for reforms.

While the EC is being more lenient, it maintains the pressure, Le Monde notes, and no one wants to touch the pact at its core, as it reassured investors at the height of the crisis. The new flexibility in European budget rules is in no way a means for France to postpone reforms, Eurogroup President Jeroen Dijsselbloem tells Het Financieele Dagblad. For Handelsblatt’s Ruth Berschens, there is however a reasonable chance that the third French violation of fiscal rules will go unpunished. Commissioner Moscovici interprets the European Stability Pact in a much looser way than any of his predecessors.

The European Commission is being remarkably mild with over-indebted France, SZ stresses. Les Echos even claims that it is now unlikely that Brussels will be forced to slap sanctions on France and Italy – where Economy Minister Pier Carlo Padoan welcomes the EC decision to allow for more flexibility on budget targets, as Italian media report – in mid-March. European Commission President Jean-Claude Juncker, the newspaper notes, tipped the scales in favour of the proposal to cater to socialists because he is convinced of the need to move on from austerity in order to give his investment plan for Europe a fair shot.

Gianni Pittella, President of the Progressive Alliance of Socialists and Democrats (S&D) in the European Parliament, welcomes – in an interview with Les Echos – the EC’s announcement and thanks Commissioner Moscovici and EC Vice-President Dombrovskis for making “the Stability Pact be about growth too.” Mr Pittella also considers that the EC’s move should alleviate tensions regarding Greece, as it makes it possible to talk about a renegotiation of Greece’s debt.

In an opinion piece, notes that the statements of Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos before the College of Commissioners concerning the need for flexibility in the implementation of the Fiscal Compact and the Stability Pact for southern European countries constituted divergence with the sacrosanct policies that have brought the EU to the lowest point in its history. Even some mainstream observers now believe that a Syriza win could be beneficial, as it would give momentum to growth-promoting policies,L’Humanité comments, adding that anti-austerity parties are also gaining ground in Spain and Ireland. European politicians, German media say, are divided on the issue of a possible debt cut,

Germany being strictly against such a possibility, as is Finland. In an interview with The Financial Times, Finnish Prime Minister Alex Stubb indeed reveals that he will not support debt forgiveness. The probability of Greece leaving the euro area is still lower than it was at the peak of the debt crisis in 2012, and the risk of contagion to other states from the monetary union remains lower than it was then, reckons Moody’s financial rating agency, Gandul.Info,  report. But there are still some risks, certain European media stress.© European Union, 2015

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