Abstract
In November 2004, France and Germany obtained from the Council of the Finance Ministers (Ecofin) suspension of the 'excessive deficits procedure' recommended by the European Commission in application of the norms established by the Maastricht Treaty and the Stability and Growth Pact (SGP). The decision was unanimously viewed as the political end of the SGP in its then current form. In March 2005, the Ecofin approved a revision of the rules on the excessive deficit procedure. Was the breakdown of the SGP in 2004 due to brute political pressure applied by the major stakeholders? Was it merely by chance that it occurred after three years of stagnation, if not recession, in the euro area, and that the drive for reform was led by the two early guardians of the SGP orthodoxy? Will the new SGP be more successful in combining 'rigour and flexibility'?
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