The markets already know that budget deficits are higher than normal for this stage of the economic cycle, throughout Europe. So it is hard to see why yesterday's meeting should have caused much excitement. Europe's fiscal predicament is a legacy of German unification. Germany needed high interest rates to keep inflation down, and these high rates were forced on other members of the European exchange rate mechanism by the need to defend their currencies. So fiscal policy was loosened instead.
The idea that the EU can realistically expect to impose sanctions upon 10 of its 12 members in the near future because of their fiscal positions beggars belief. France, Italy and Spain all have difficult budgets to present this month.
With the inter-governmental conference to discuss a single currency not due until 1996, the monetary committee's musings are hardly likely to affect what they do in the next few weeks. These events do, however, provide governments with a welcome reminder that the markets will be looking for substantial progress in cutting government borrowing as the European recovery strengthens.
There is an important message for Britain too. Last year's Budgets have done a lot of good work putting tax rises in place to narrow the budget deficit. Loose talk of pre-election tax cuts could undo all that good work in the eyes of the markets, with uncomfortable consequences for the pound and interest rates.