EU Takes EU to Court

The EU executive, which is responsible for enforcing laws in the 15-member bloc, argued that taking finance ministers to court was vital to clarify disciplinary procedures for those who break the EU’s guidelines on deficit spending, as France and Germany have done repeatedly. But the unprecedented legal move is expected to generate a considerable amount of friction at a time when the EU is concerned about maintaining cohesion.

German Finance Minister Hans Eichel said the decision to go to the European Court of Justice was "hard to understand" and added that he saw no wrong doing in the finance minister’s Nov. 25 decision to forego disciplinary action against Berlin and Paris for violating the stability pact. The results of the Ecofin (council of European finance ministers) meeting "correspond to the spirit and the letter of the Stability and Growth Pact," he said in a statement released on Tuesday. "The procedures that are foreseen (in the pact) were upheld."

At the meeting, Germany and France, Europe’s two biggest economies, used their combined influence to convince Ecofin to reject the Commission’s recommendation to punish Berlin and Paris for running up excessive budget deficits by slapping them with steep fines and forcing them to make deeper deficit cuts in 2004. The Commission is now seeking a ruling on whether the ministers violated procedure in taking an ad hoc decision against the EU executive branch.

Brussels vs. Brussels

"Not least with a view to the tasks the European Union faces in the near future, it would be more helpful to aim for cooperation rather than confrontation," Eichel said in response to the Commission’s legal challenge.

But EU Monetary Affairs Commssioner Pedro Solbes, whose office oversees the Stability Pact, has argued that Brussels has a duty to uphold the law and avoid a precedent that could legitimize rule-breaking in the future and ultimately undermine the EU treaty.

French Prime Minister Jean-Pierre Raffarin acknowledged that it was the Commission’s right to seek recourse in court, but insisted the finance minister’s decision was legal. "I respect the decision of the Commission, but I am not worried about the result," he told reporters during a visit in Brussels.

Legal advisors to the member states in the EU Council said the ministers had a discretionary power to overturn the Commission’s recommendation and doubt the EU executive will come out a clear winner in court.

A house divided against itself

The Commission itself is divided over the decision to seek legal action. The move is seen as a risky one, which could seriously undermine the authority of the executive branch if the EU’s top court rules the finance ministers’ action legal.

Solbes' spokesman, Gerassimos Thomas, admitted there were possible risks involved in taking the case to court, but said "it had to be done," and that it is the Commission’s "role as guardian of the treaty to ensure that provisions are upheld."

Although nothing has been made public about internal discussion surrounding the Commission’s action, Thomas confirmed that Tuesday’s decision had not been unanimous among the 20 commissioners. Sources in Brussels say the French, German and British commissioners were against taking legal action.

It is also not certain whether the Court of Justice will agree to the Commission’s request for a fast-track procedure that would lead to a decision in three to six months rather than the normal two years.

Solbes, however, is convinced the risky legal move is the correct strategy for the Commission. Speaking to reporters after the announcement was made, he said the court challenge "has had great support, even if not all commissioners have agreed on all different aspects of the strategy."