Reading accounts of the deal agreed between Nicolas Sarkozy and Angela Merkel last night to impose new rules on EU countries to guarantee fiscal discipline, you might think the two countries were uniting to save the Eurozone from its more profligate members.
But which two countries first broke the rule that deficits should not go above 3 per cent of GDP? It was France and Germany, back in 2003. What’s more, the two then united to make sure that they wouldn’t face sanctions for doing so – effectively destroying the rules (known as the “growth and stability pact”) altogether.
What’s more, they were supported in this action by the UK (otherwise known as the country that like to lecture others on fiscal discipline). Gordon Brown was chancellor at the time. Read more