May 14, 2003	Wednesday	Rabi-ul-Awwal 11, 1424

BRUSSELS, May 13: France threw a new spanner into the euro zone’s stuttering Stability and Growth Pact on Tuesday by claiming that a 2006 target for member countries to balance their budgets had been abandoned.

Germany, the latest country in the dog house over breaching deficit rules, also reiterated that the 2006 target was unrealistic.

“Because of weak growth in 2001, 2002 and 2003 the aim of presenting a balanced budget in 2006 can no longer be achieved,” said German Finance Minister Hans Eichel.

Finance Minister Francis Mer said the European Union’s executive commission, the guardian of the stability pact, had abandoned the 2006 target, which was agreed by all the euro countries except France last November.

But Mr Mer insisted at a Brussels meeting of EU finance ministers that France remained committed to the “spirit” of the stability pact, under which member states must keep their public deficits under three per cent of gross domestic product.

“The spirit of the pact has never been in doubt,” he told reporters, adding that nobody was seeking to renegotiate the agreement and that the three-per cent ceiling remained an important “symbol”.

But as regards the 2006 target, “everyone recognizes that putting a date on the table for its own sake doesn’t accomplish anything,” Mr Mer said. “The 2006 target has disappeared from Commission thinking,” he claimed.

Alone of the 12 euro nations, France has held out against the deadline on the grounds that its priority must be reinvigorating its sluggish economy rather than tightening its belt.

The stability pact has come under mounting criticism as a slowdown bites into economic growth in the EU, with European Commission president Romano Prodi infamously describing it as “stupid”.—AFP