Looking forwards rather than backwards, I can’t help trying to imagine what the world will look like on Monday. (We may all be in for a surprise, but the latest poll seems to put the ‘no’ at 55%, which is quite a large margin of error if it’s wrong, *and* Le Monde today makes the point that as the ‘no’ rises and rises in the polls, the number of undecided voters continues to reduce).

Well, ironically I think one of the consequences will be an attempt to enforce the Stability and Growth Pact. This is why I mention being fair and balanced, since in the past I may have been a little too cynical about this: although not without reason.

I now think The Pact Mark II may have considerably more bite, here’s why:

* The first and most obvious reason is that the Commission will feel some need to be proactive in the face of defeat: the best defence is attack. The euro will need defending, and one of the best ways of doing it may be to show that you mean business. A vigorous defence of the pact would also take some heat off the ‘hard pressed’ ECB.

* Secondly, simple pragmatics: under the ‘old’ criteria France and Germany were among the prime offenders. Strong action against the eurozone’s most powerful members was always going to be a non-starter. Now, under the new criteria, the leading offenders are Portugal, Greece, and Italy. This is much more ‘doable’.

* Thirdly the euro is after all new. It was again always unrealistic to imagine that implementing excess deficit procedures was going to be easy. You need some learning by doing. So the failure of Mark I can be seen as a learning exercise.

* The new criteria – accumulated debt as a % of GDP, and a cyclical component in deficits – are reasonably easy to track and measure. Add to which the Commission has now put in place a much more systematic procedure for doing this.

In fact I started thinking about all this when I went over to the Commission looking for some background data on Portugal.

There is now a webpage dedicated to the examination of the Stability and Convergence programmes. Actually the page at the time of writing is a bit of a mess – in my browser at least – but you can get all the info by clicking on the respective countries.

What I notice is that there is a distinct improvement in the 2004/5 material over the 2003/4. What I think this suggests is that the ‘scrutiny’ procedure is becoming more serious. I also think Eurostat are becoming more sophistocated in spotting the ‘tricks’.

So we should not be too cynical. Of course, there is no guarantee that squeezing – eg Italy – will work. The medicine may not cure the patient. But this only time will tell for sure.

If you note a certain element of implied self-criticism in this post, you would be right :).