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Cini: European Union Politics 2e

Chapter 12

Judgement of the European Court of Justice on the Stability and Growth Pact (Case C-27/04)

In November 2003, France and Germany succeeded in forming a coalition to overrule the recommendation by the Commission and instead to put the Stability and Growth Pact (SGP) 'in abeyance' (Economist 15 January 2004) after they failed to cut their budget deficits to below the 3%. The European Commissioner for Economic and Monetary Affairs, Mr. Pedro Solbes, stressed that there would be no exception for EU budget sanctions to any eurozone member state which fails to get its finances in order (EU Business 14 November 2003; BBC News, 19 November 2003). The Commission resorted to legal action in taking France and Germany to the European Court of Justice (ECJ) in order to uphold the budgetary rules underpinning the euro (BBC News 13 January 2004).

The ECJ's ruling was expected to affect significantly the public's perceptions of policy-making procedures and frameworks over the euro in the eurozone. On 13 July 2004 the ECJ annulled the Council's conclusions to suspend effectively an excessive deficit procedure against France and Germany. " The Court declares the action inadmissible insofar as it concerns the Commission's claim that it should annul the Council 's failure to adopt decisions to give notice to France and Germany. On the other hand, the Court annuls the conclusions adopted by the Council in which the Council held the excessive deficit procedures in abeyance and modified the recommendations previously made by it to each of those Member States for correction of their excessive deficit " (Full text of press release can be found on www.curia.eu.int/en/actu/communiques/cp04/aff/cp040057en.pdf).

Although the ECJ's ruling confirms an important victory for the Commission as the guardian of the Treaties, it is not expected to impose sanctions against Germany and France anytime soon. Rather, it is believed that a debate over the possible revision of the SGP will be settled politically, not judicially, and the question of how to enforce fiscal discipline among member states of the eurozone still remains to be resolved.

Web Links

EUMAP – Monitoring human rights and the role of law in Europe
www.eumap.org/

Eur-Lex – The access to European Union Law
europa.eu.int/eur-lex/lex/en/index.htm

European Judicial Network (EJN)
www.ejn-crimjust.eu.int/

Conférence des Notariats de l'Union Européenne (CNUE)
www.cnue.be/fr/000/mot_president_005.html

Further Learning Resources

Archive of European Integration (AEI) on the European Court of Justice – University of Pittsburgh (aei.pitt.edu/view/subjects/D005012.html)

Garrett, Geoffrey (1995), 'The Politics of Legal Integration in the EU', International Organisation, Vol.49, No.1, pp.171-81.

Mattli, Walter and Slaughter, Anne-Marie (1995), 'Law and Politics in the European Union: A Reply to Garrett', International Organisation, Vol.49, No.1, pp.183-90.

de Burca, Grainne and Weiler, Joseph H. H. (eds) (2002), The European Court of Justice , Oxford , Oxford University Press.