Stupide. So much so that with Covid-19 the fiscal rules for the Economic and Monetary Union (EMU) of the EU have been suspended. After almost twenty years, that hardly institutional attribute expressed by one of the most institutional figures in the EU still echoes. The then President of the European Commission Romano Prodi had criticized, in an interview with Le Monde on 18 October 2002, the rigidity of the Stability and Growth Pact (hereinafter “the Pact”).
The Pact was based on two pillars: the carrot of Teutonic credibility on the monetary policy front and the stick that, starting from a minor lèse-majesté for a preventive control on public finance balances, could reach a less slight monetary sanction in case excessive deficit, the infamous 3% of GDP threshold. The objectivity of these rules, which in a Manichean manner divided fiscal policies into virtuous and vicious based on the annual balance, did not do justice to the quality of public spending. The fact is that a year later, the stupidity of the design of the Pact was translated downstream on its enforcement when, in November 2003, the Ecofin Council did not vote on the sanctions proposed by the Commission for France and Germany for excessive deficit[1].