Somehow, I thought that the budgetary-deficit limit in the Maastricht Treaty governing the Euro-Zone membership criteria had some kind of economic logic behind it. Well, guess what, it doesn’t!
Members of the Euro-Zone are to limit their annual budgetary deficit to a MAXIMUM of 3% of GDP and the nation’s debt must not exceed 60% of GDP. Seriously, those are the limits to be strictly respected for possible consideration to become part of the Euro-Zone!!! If those criteria were to be enforced, there would not be much of a Euro-Zone left today, as it would be composed of Finland, Luxemburg and Estonia!
I read the other day in the French press (ok, it was Le Parisien, but still) that the 3% was in fact first made up in less than an hour back in 1981 when François Mitterand was looking for some kind of a limit to impose to his Ministers regarding the maximum budgetary deficit that would be acceptable. And the figure of 3% was fixed because…. it’s easy to remember (sic!).
And years later the Brussels bureaucrats picked it up as a “golden rule” to define the so-called Maastricht criteria. Is this crazy or what? Funny enough, scientific or “easy to remember”, it has gone from the maximum admissible to the “goal to reach”, as basically all Euro-Zone members are above and have been there for some years (except Germany of course, joined by Malta, Finland, Luxemburg and Estonia for 2011 – for 2010 only Germany, Luxemburg and Estonia).
It is somewhat mind-boggling to see how economic decisions are made and (un)-enforced. Back to my views on the level of understanding and resulting irresponsibility of the political class referred to in “2084”. I am really freightened to see how right the judgements made in the book really are… Or is it just me?
Anyway, courage everybody, we’re all on the same boat and heading for nowhere!
Simon Q.