Two recent instances of flagrant infringement of agreed EU rules – the submission by Italy and France of budget plans for 2015 that clearly violated their governments’ vows of continued austerity under the Stability and Growth Pact and David Cameron’s petulant refusal to pay a back payment of billions of euros to the EU budget – threaten the EU’s fundamental workings, which are based on a clear rulebook enforced vigorously by a strong Commission. As warned by Daniel Gros in his latest CEPS Commentary, Juncker’s Commission risks losing its authority from the start if rules can be bent or broken to accommodate the larger member states’ domestic political priorities. He also calls upon leaders in member states to play their part as well. Pandering to populists may be attractive in terms of short-term electoral gains, but the long-term cost in terms of credibility, both their own and that of the EU, will be very high.
Daniel Gros is Director of CEPS. This commentary was previously published by Project Syndicate, 10 November 2014, and syndicated to newspapers and journals worldwide (http://www.project-syndicate.org/commentary/european-commission-lax-fiscal-rules-by-daniel-gros-2014-11) and is republished here with the kind permission of Project Syndicate.