The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

EU stability pact row threatens reform drive

The imminent accession of 10 countries to the European Union comes at an inauspicious time for the EU project, with the collapse of constitutional proposals and an undermined Stability and Growth Pact. This will alter accession countries' attitudes to their obligations, with consequences for eastern European finance. Julian Evans reports.

 Miklos and Raczk 
believe weakening of
the Maastricht criteria
and different treatment
for different countries
spells danger for the EU

THE BLOW TO the European Union's Stability and Growth Pact in November 2003, with France and Germany ignoring the demands of the European Commission to lower their budget deficits, has shaken the EU just as it prepares to welcome new members. On May 1, 10 accession countries will join a union in which the EC is locked in a bitter legal battle with member states. As Ilmars Rimsevics, governor of Latvia's central bank, says: "People are asking: 'Why are you joining a union that is dying?' The biggest pessimists are already saying that monetary union is dead."

Monetary union may not be quite dead. But fiscal union certainly seems to be in a critical condition after the French and Germans rejected a demand that they reduce their budget deficits closer to the 3% of GDP level required by Maastricht Treaty criteria. Ecofin (the council of EU finance ministers) decided not to impose sanctions of 0.5%

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree