The ‘competitiveness pact’ hammered out between Paris and Berlin could yet be a milestone in the construction of Europe, says Le Monde. If only they had not relegated the other member states and the Commission itself to mere onlookers.

Paris and Berlin have not always seen eye-to-eye on issues of economic governance, but now that is set to change with the a pact designed to bring about policy convergence in the 17 Eurozone countries, and ideally in the rest of the Union, which will include provisions on public sector wages, corporation tax, retirement, and public spending. The initiative marks a major shift in the position of Chancellor Angela Merkel and her colleagues in the German government, who were so reluctant to come to the aid of the Greece in the spring of 2010 – and should be hailed as a positive development. There is no longer any question of German isolationism. On the contrary, Mrs Merkel now aims to launch a major drive for economic and monetary consolidation within the EU, and her renewed commitment to the European project should certainly be praised. At the same time, however, her proposal raises a number of questions that are cause for concern. First and foremost, there is the issue of the content of the "competitiveness pact”. There is no denying the need for financially stable pension systems, but Germany’s suggestion that raising the retirement age to 67 contributes to competitiveness is highly debatable. The country, which could be criticised for having no minimum wage legislation, should be careful that its pact does not become a mechanism to undermine the welfare state.

‘Dangerous precedent’

Secondly, there is the issue of the manner in which Germany and France have forged ahead with this plan, which has effectively relegated the European Commission to the role of expert consultant. That is not to say that the Franco-German initiative does not deserve a positive welcome, but that in the long-term it may set a dangerous precedent that could undermine the prerogatives of the European Commission. Thirdly, there is the question of European development. The competitiveness of the European Union is simply a matter of national economies, and in this regard, it is worth noting that the pact does not include any mention of infrastructure projects, notably in the field of energy, which could enable the EU to be more competitive. However, in spite of these reservations, the fact that Europe’s politicians are no longer content to simply put out fires but are actively taking control of a difficult situation is certainly positive. The pact project is the first step towards greater economic coordination in Eurozone which is most definitely necessary.