This is what Joaquín Almunia, European Commissioner For Economic And Monetary Policy has to say about the Stability and Growth Pact (25 February 2009)

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The downturn, interventions in the banking sector and stimulus measures are all taking their toll on public finances. The government deficit is projected to reach 4.8% of the EU GDP in 2010, its highest level in 15 years.

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This morning the Commission adopted opinions on the second batch of Member States' Stability and Convergence Programmes - the documents in which countries detail their budgetary plans for the next five years. Six countries foresee deficits above 3% of GDP and therefore, in accordance with the Treaty, the Commission has adopted excessive deficit reports under Article 104.3.

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I want to stress that the Pact is not about sanctions; is about peer pressure and support for sound policies. It is about anchoring credibility for member states public finances - and that is particularly pertinent when we consider widening spreads and the pressure that some countries are being placed under by the markets.

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Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith