SWEDEN

SWEDEN
Dagens Nyheter, Stockholm, Nov. 3: With just a year until the U.S. presidential election, George W. Bush no longer appears unbeatable.
Evidently, the situation in Iraq will play an important role in the outcome of the election.
The American pitch toward Iran and North Korea, two of the countries branded by Bush as part of an axis of evil, have been toned down and there is no threat of military action, the president's national security adviser, Condoleezza Rice, said Sunday. Maybe her statement promises a softer foreign policy. If so, it would be understandable.
Uncertain future
The United States is stuck in a country where the problems are mounting, the lawlessness spreading and the future seems frightfully uncertain.
Whomever challenges Bush, it is evident that foreign policy and the situation in Iraq will dominate the campaign.
Perhaps that is why the White House has begun toning down the rhetoric.
FINLAND
Helsingin Sanomat, Helsinki, Nov. 5: The European Commission and EU finance ministers have been given the job as guardians of the stability and growth pact. The Commission is to report any violations of the budget deficit cap and present an action plan to be approved by the finance ministers. In extreme cases a country that violates the agreement could be given a fine amounting to billions of euros.
Now, we are precisely in such a situation with France ... whose budget deficit will exceed, for the third consecutive time, the cap as specified in the stability pact. The thankless task of the finance ministers is to be hostage to the pact. France does not want any quick measures to fix its finance policy and it is supported by Germany whose budget deficit also is slipping out of control. And, France has found understanding from the current EU chair, Italy, which has its own financial problems.
Automatic punishment
In such a situation EU finance ministers are unable to make clear decisions which would force France to tighten its finance policy against its will. The weakness of the stability pact is, on the one hand, its inflexibility, and on the other, that the incentives are open to political decisions. The criteria for good economic policy should be extended to include, among other things, the degree of debt and automatic punishment for those who break the pact.