- The Washington Times - Tuesday, October 22, 2002

BRUSSELS (AP) The European Union's chief executive, under fire for calling the rules behind the euro "stupid," asked for more power to enforce them in a more "intelligent" way yesterday.
Called to explain himself before the European Parliament in Strasbourg, France, European Commission President Romano Prodi stood by his characterization of the so-called "stability pact" as "stupid," a word he used last week in a French newspaper interview.
He praised the rules for successfully introducing a "culture of stability" in the euro-zone, and said he remained a "firm believer" in their value for restraining government overspending that could undermine the euro.
But he did not want to "just enforce rules blindly," especially given the serious downturn in the global economy since they were adopted five years ago.
"Enforcing the pact inflexibly and dogmatically, regardless of changing circumstances that is what I called, and still call, stupid," Mr. Prodi said.
With Germany, France, Italy and Portugal in danger of violating their obligations to keep deficits under control this year, Mr. Prodi said the Commission would have been "accused of endangering jobs and growth" if it tried to "impose objectives that were no longer realistic."
It has proposed extending the deadline for a balanced budget by two years, to 2006, and to take economic cycles more into account when calculating budget deficits.
His economic-affairs commissioner, Pedro Solbes, told Parliament that the 12 countries using the euro must respect the deficit cap of 3 percent of gross domestic product.
Noting that Berlin managed to block the European Commission's attempt early this year to send an early warning over its spending plans, Mr. Prodi called for giving the Commission the authority to adapt and enforce the rules on its own as an "impartial referee."
"We need an authority that has the power to give guidance to the system in a way that is both rigorous and intelligent, and bearing the complexity of our economies in mind," he said.
The Commission, the guardian of EU treaties, has made such proposals to a convention working on drafting a constitution for the EU, to be presented for debate next year.


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