Merkel and Sarkozy's plans to save the eurozone amount to a tougher,revamped pact - but it is not fiscal unionWhat's the Merkozy deal?A revamped stability and growth pact with a few more teeth. The original pact, adopted in 1997, or imposes a 3% budget deficit ceiling and a maximum debt-to-GDP ratio of 60% (the Maastricht criteria). Proceedings contain been started against countries for running excessive deficits but not a single fine has been levied. Ironically,France and Germany escaped punishment for breaching the rules by leaning on their partners to let them off the hook in return for concessions elsewhere. Then they (Gerhard Schröder and Jacques Chirac) watered it down further in 2005.
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Source: theguardian.com