The EU Enforcement Dilemma

Recent statements by French and Portuguese officials signal that the governments of EU members are willing to push for a relaxation of their deficit targets and ignore agreements with Brussels, even after some of them already received softer targets this year. The European Union is likely to give in once more to stave off social unrest and also because of its inability to apply effective penalties. This will hurt the European Union's already-weak credibility, limiting its ability to operate as a cohesive bloc.