A majority of the 20 members of the European Commission voted to appeal to the European Court of Justice in Luxembourg to overturn the November decision by EU finance ministers not to impose sanctions on Paris and Berlin for maintaining budget deficits of more than 3 percent of gross domestic product. “This had to be done,” said a spokesman for EU monetary affairs commissioner Pedro Sobles. “It is our role as guardian of the treaty to ensure that treaty provisions are upheld.” The European Commission is asking the court to put this case on the “fast track” and make a decision within six months rather than the standard two years.

At the heart of the dispute are deep divisions between competing states allied with the Franco-German bloc that has dominated the EU, on the one hand, or with its main competitor across the Atlantic—Washington, on the other.

At the November 25 finance ministers’ meeting the representatives of Austria, Finland, Netherlands, and Spain formed the minority in voting against giving Paris and Berlin more time to bring their deficits into line.  
 
Collapse of constitutional conference
The EU executive’s decision to bring the case to court comes just one month after a December summit set for establishing a European constitution collapsed amid divisions over voting powers. The governments of Spain and Poland led the opposition to a French-German proposal that would have altered the current voting formula that gives countries with smaller populations almost equal voting weight as those with substantially larger populations.

Madrid and Warsaw, a prospective EU member, have been at the head of the opposition bloc in the European Union against the “old Europe” dominated by Paris and Berlin. They, along with other European governments, have aligned themselves more and more with Washington—a bloc which U.S. defense secretary Donald Rumsfeld took delight last year in calling “New Europe.”

The commission states that its suit concerns “purely and simply procedural matters” and it is only requesting a legal decision. While the court is mulling over the case in the months ahead, the European Union will expand to 25 members, hold Europe-wide elections, go another round in its debate over a constitution, choose a new commission president to replace Romano Prodi of Italy, and ditscuss whether to begin membership negotiations with Turkey.

Paris and Berlin are in no mood to accept fines for violating EU rules as their economies skirt with recession—or go over the line. Official statistics show that Germany’s gross domestic product shrank by 0.1 percent in 2003, its weakest annual performance in a decade. The sharp rise in the value of the euro against the dollar, which has been reaching record highs almost every day, has been a growing problem for European exporters. The European Central Bank president called the impact of the euro’s rise “brutal.”

“Scores of Germany’s low-margin, export-dependent manufacturers—carmakers, tool manufacturers and electronics groups—are beginning to sweat,” noted London’s Financial Times, “as the euro, already up by more than 20 per cent over the past year, stampedes ahead towards $1.30.”

French prime minister Jean-Pierre Raffarin wrote in the London daily that the stability pact, which Paris had defended before it fell on hard times, “is still too insensitive to economic cycles.” He rhapsodized that Europe “is first and foremost a state of mind, a community of souls,” and then called on other representatives of finance capital in the EU “to point out the damage wrought by the instability of the dollar and euro exchange rates.”  
 
 
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