Europe’s plans for laxer spending rules shows German influence is waning

dog in hot dog, a koala bear ain’t no bear, and let us not speak of urinal cakes. What of the ’s “Stability and Growth Pact” ()? The agreement limiting how much debt national governments can run up has achieved neither of its stated objectives: Europe endured a prolonged currency crisis and decades of economic torpor. Thus few bemoaned the pact’s suspension in 2020 as Europe splurged its way through the pandemic and now scrambles to offset soaring energy bills. Germany is now pushing for the old straitjacket to be reintroduced, but only a much looser arrangement looks likely. That hawks in Berlin are likely to be defied shows how much German influence has waned.No fault line in the is as deep as that separating the frugal northerners from their supposedly spendthrift southern neighbours. The was an attempt to bridge the divide. Devised in the run-up to the introduction of the euro in 1999, it capped annual budget deficits at 3% and overall debt at 60% of . Italy and Greece would share a currency with Germany and the Netherlands, but only if they also shared their sober approach to public finances. It was never really thus: the pact was soon broken willy-nilly, even by Germany, in its first few years. Many countries ended up with debts over 100% of as the global financial crisis unfolded. By the 2010s the bail-outs the pact was designed to avoid became unavoidable.