The European Commission insisted today that the Stability and Growth Pact is the "cornerstone" of the area's economy, despite proposing a delay in a key deadline.
"The pact remains the cornerstone of the fundamental good health of the European economy," said a spokesman for Commission President Mr Romano Prodi.
His comments came after the commission admitted yesterday that the deadline for the 12 euro-zone countries to balance their budgets by 2004 was no longer feasible.
The commission proposed delaying the deadline until 2006, a proposal that will be considered by finance ministers at a regular meeting next month.
The Commission came under fire today for postponing the deadline, with some small countries angry that Europe's big economies were being let off the hook.
The Netherlands and Austria criticised the European Union executive's surprise proposal, announced yesterday, to give Germany, France, Italy and Portugal two extra years to get rid of their deficits due to sluggish economic growth.
While France and Italy were quick to hail the move, Belgian Finance Minister Mr Didier Reynders said in a radio interview the EU's Stability and Growth Pact, designed to safeguard the euro, was at risk if big countries let their deficits slide.
"If next year or in 2004 the German, Italian or French budgets should again veer away from an equilibrium, I think we would not only put at risk the pact but the legitimate confidence of investors and consumers in the evolution of the European Union," he said.
Dutch Finance Minister Mr Hans Hoogervorst said he was "deeply unhappy" with the plans, adding: "It is an extraordinarily bad signal which could erode trust in the euro." "If it had not been big countries like Germany, France and Italy but, for instance, the Netherlands, Belgium and Luxembourg I would not know whether the Commission would have taken the same position," he told parliament.
The euro zone's biggest economies certainly have budget difficulties, as their deficits near the Stability Pact's limit of three percent of gross domestic product.