By Anna McLauchlin - 30th March 2004
The future of the rules underpinning the euro will be at stake at an EU court hearing set for April 28.
The European Commission is taking the council of ministers to the European Court of Justice for breach of the eurozone's budget rules laid out in the stability and growth pact.
A single hearing will see both sides' legal teams battle it out in Luxembourg in a case that is due to last between three and six months under the ECJ's fast track procedure.
Individual member states are allowed to make observations to be considered as part of the case but only with express permission from the ECJ president.
The ECJ would not say on Wednesday whether any member states had requested to do so.
Ministers suspended the stability pact in November 2003 rather than apply its sanctions to France and Germany for exceeding its three per cent of GDP deficit limit for three years running.
Instead they said Paris and Berlin could simply commit to reining in deficit under three per cent by 2005.
Economic commissioner Pedro Solbes called the move unlawful and the commission then decided to take the matter to court.
If the court finds in favour of the member states it will further undermine the power of the pact created by the commission in 1999 to keep euro governments' public finances in line.
Plans to make the pact more flexible for example in the case of a prolonged economic downturn were scheduled for the spring but Solbes' recent resignation may delay the move.
The commission needs clarity on the future of the pact as deficits in Europe are failing to improve.
The Netherlands, a vocal supporter of upholding the pact, is the latest casualty of the economic lull.
In March the low country revealed deficit had crept up to three per cent in 2003.
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