In the fraught debate over the European Union's stability and growth pact, Gerhard Schröder, the German chancellor, has proposed that the budget deficit limit of 3 per cent be lifted when governments do good things or face difficult economic conditions.

Since these qualifications can only be written down in vague terms, he in effect suggests that the decision be left to the Council of Ministers. Put differently, the decision to put a country under the excessive deficit procedure will be based on political, not economic criteria. In practice, the larger countries will be let off the hook when they misbehave, while the smaller countries will be tied to the mast if only to prove that the pact is alive and well.