Harney, Cox say hands off Pact rebels
Finance Minister Charlie McCreevey has been making similar suggestions in the lead-up to his taking over the chair of the EU's Ecofin Council from January.
Ms Harney, who will chair the prestigious Competitiveness Council, emphasised the need to reinterpret the Pact in a way that will not hinder growth. She agreed with the German Finance Minister, Hans Eichel, who said the Pact should not be interpreted in a mechanistic way.
"Our economies are not machines. Our fiscal policies are not computer programmes. Our Pact is not, as he wrote, 'a code of sanctions', but rather, 'an adaptable framework for taking action on the economy'", she told the Institute of European Affairs.
The Tánaiste said she strongly agreed that EU co-ordination of fiscal policy must be adaptable to achieve its main purpose which was sustainable growth. It needed to be responsive to the needs of the people and it must have their confidence.
However, she added, "Let us not forget that confidence is helped, not hindered, when people abide by rules they agreed together."
Mr Cox suggested moving against France and Germany might have the effect of retarding the recovery of the eurozone economy given that these countries had the largest economies.
"Imposing stringent conditions on such a huge proportion of the European economy, with cuts in spending and higher taxes is unlikely to increase growth. The policy risks being pro-cyclical it's like kicking a dog when it's down," he said.
Mr Cox said that in the past some smaller states, including Ireland, got a yellow card for breaking the rules and this was the first time the eurozone was moving towards a red card.
As an economist he believed that sanctions against one member state emerging from recession and another not firing on all cylinders might be counter-productive at this time.
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