Pact in crisis as big two go unpunished

THE Stability and Growth Pact was in crisis last night as the European Commission considers bringing the European Union’s finance ministers to court for refusing to take action against France and Germany.

Most of Europe's finance minister including Charlie McCreevy voted not to fine the EU's two largest countries for breaching the rules of the pact yesterday, leaving its credibility in tatters according to some commentators.

The row immediately impacted on the price of the euro against the dollar on international markets and has led to fears of inflation and increased interest rates.