Europees Hof spreekt zich uit over Stabiliteitspact (en)

EUOBSERVER / BRUSSELS - The bitter dispute between the Commission and member states over the euro rules will resurface tomorrow (28 April) in the European Court of Justice in Luxembourg.

The row started last November when Brussels proposed that France and Germany be punished for repeated breaches of the so-called Stability Pact, which decrees that budgets deficits must be kept under three percent of GDP.

But Paris and Berlin garnered enough support amongst their colleagues to vote down the proposals, infuriating the Commission and smaller member states such as Austria and the Netherlands, who argued that Germany and France should feel the full weight of the law.

Early this year the European Commission decided to take member states to court.

One shot only

Sources close to the court expect this to be the only hearing to take place. Second hearings are rare at the European Court of Justice.

And the drama will be played out not between Commissioners and finance ministers, but between the legal teams of both sides.

The action is expected to last no more than an hour. Each legal team will speak for half an hour, sources have confirmed, followed by questions from the judges.

Although the hearing will be short-lived, its implications are enormous for the economy of the EU.

Awkward situation

If Brussels is victorious in the court battle, the disciplinary procedure could be revived. The final stage of this procedure is fines of up to 0.5 percent of GDP, which, in the case of France and Germany, would run into billions of euro.

But if the Commission loses the case, it effectively buries the Stability Pact and undermines the credibility of the rules underpinning the euro.

It would also call into question the suitability of the Commission to act as "Guardian of the Treaties" and prove that the real power lies in the hands of member states.

The results of the judges' deliberations are expected in early summer, according to ECJ sources.

However, the exact timing is difficult to ascertain as it is only the third time the 'accelerated procedure' - whereby the court's procedures are fast-tracked - has been used.