issue 1 - Roland Berger

DOSSIER #01 Interview
are either experiencing or facing the possibility of
ongoing recession. Other states have had to deal
with—or are now dealing with—unforeseen events
that have led to their running up a budgetary deficit
within a very short period. In this situation, it’s not
enough simply to insist on the terms of the treaty.
We need to find ways and means for our member
countries to lift themselves out of these crises by
themselves. The consensus is that the key parameters
of the stability pact will not be altered. However,
we must find new instruments that will help us react
more flexibly to the economic difficulties of any
member state
»We must find new
instruments that will help
us react more flexibly to
the economic difficulties
of any member state.«
The stability pact has an important function. It is
an EU directive, making it a mandatory reference
parameter for the national budgets of the member
states. Among its fixed requirements are a maximum
deficit of 3 percent and a maximum public debt
of 60 percent—with both figures calculated as a
share of GDP. But we must also firmly bear in mind
what the initial situation was when this stability pact
was concluded. Only then can we design a monetary
and economic policy that is realistic both for today
and for the future. Now that the EU has enlarged
from 15 to 25 countries, this consideration is becoming
even more important.
When you talk about the initial situation, do you
mean the Maastricht Treaty of 1993?
Yes, exactly. Back then, a little over a decade ago,
there were only 12 member states. At that time a
growth rate of 3 percent didn’t seem unduly optimistic.
But since then we have had to face up to
some additional facts, such as that many countries
This sounds almost too good to be true: The Commission
is displaying leniency and understanding, even
though many suspect member states may have
been presenting false statistics for years to gain the
financial benefits of European Union membership.
That’s not the case at all. We at the Commission will
never get to the point where we overlook wrongdoing
with a wink and a smile, and politely ask the culprits
to do better in future. No, all the facts that have
recently come to light indicate just one thing: Every
country has its own individual history when it comes
to financial policy. This is why for me it is a question
of monitoring and analyzing all these complex circumstances,
so that we can pursue a sustainable
financial policy. After all, how did things look in
Germany back when its economy was still going
strong? Did anyone seriously entertain the notion
that lean years might be just around the corner? No,
of course they didn’t. And that is an example of why
self-criticism is the principle means of immunization
against repeating past mistakes.
How does the Commission intend to ensure that
there will be no future violations of the stability pact?
The precautionary principle is not simply a romantic
relic from the era of the agricultural subsistence
economy. For the member states it is the only possible
means of reacting to economic fluctuations without
outside help and of maintaining a balanced
budget regardless of the perturbations of the economic
cycle. The Commission will be steadfast in
pushing for the implementation of this principle.
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think: act