25 November 2003, 12:15  EU's Solbes says deficit deal has no legal basis

BRUSSELS, Nov 25 - European Economic and Monetary Affairs Commissioner Pedro Solbes said on Tuesday a compromise plan freeing France and Germany from disciplinary action over their budget deficits had no legal basis. Asked whether the European Union's Growth and Stability pact capping budget deficits had effectively been suspended by the controversial deal, he told reporters: "No, it is not suspended. This is a crucial point for the functioning of the system." "The problem is we have a political decision which has not a legal basis and (we have) some decisions which have a legal basis which will be difficult to be applied." By the latter he appeared to be referring to the European Commission's recommendations for Germany and France to reduce their budget deficits.||

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