Financial crisis testing Eurozone's pacts

BRUSSELS, Feb. 17 (UPI) -- The European Commission's clout in dealing with ballooning deficits in France, Spain and Greece is nearly moot, an expert on the subject said.

EU economy commissioner Joaquin Almunia said the commission would move forward with disciplinary actions against member states with deficits higher than 3 percent of gross domestic product, the EU Observer reported Tuesday.

"The rules were established for everybody" Almunia told members of the European Parliament Monday.

But, Karel Lannoo at the Center for European Studies said the pact is "almost entirely dead."

"The fault was already made in October, when there was no willingness to consider this as a European problem, but rather as national problems," he said.

Individual member reactions to the financial crisis set the tone for Europe's response, Lannoo said.

Presently, the go-it-alone attitude has resulted in fears of protectionist policies, most recently highlighted by French President Nicolas Sarkozy's call for French automakers to bring production back to France.

"The same has been happening in the financial sector for four months and who is shouting about it? Almost nobody. But it's enormously distorting," Lannoo said.

"I'm surprised by the degree to which there is almost no willingness to challenge this," he said.