Ground Floor 'Do as I say and not as I do' has always been a part of life; memories of Charlie Haughey telling me to tighten an already waist-cinching belt while he frequented upmarket restaurants will stay with me forever.

But it's not just an Irish trait; it's everywhere as evidenced by last week's Ecofin meeting at which it was agreed that neither France or Germany would be punished for their breach of the European Stability and Growth Pact. The same France and Germany that have so consistently lectured smaller European countries about the importance of adhering to the limits, even when economic conditions in those countries didn't necessarily warrant it, are now telling us that it's different for them because - well, just because.

Back in the early 1990s the French and the Germans worried incessantly that countries such as Ireland and Italy would run up massive deficits and the rationale for the pact was to keep us potentially profligate spenders in line. Now it's only France and Germany as well as some aspirant member countries that exceed the 3 per cent guidelines - Ireland's deficit is under 1 per cent and Italy's is 2.3 per cent.

Of course, there were many occasions on which commentators mused that the restrictions weren't appropriate in the moribund economic zone that was Europe anyway. But that didn't stop the French and the Germans lecturing and hectoring. The ECB is rightly concerned with longer term worries about high debt levels and, like any monetary authority, must frame its policies with that longer term view in mind.

But now there are concerns that rates might rise as a kind of punishment for the French and German breaches, which would not be in the best interests of Europe as a whole. (At least not yet - despite indications of economic recovery, it's hardly party time in Europe and inflation seems to be falling, so the background for raising rates is hardly compelling.)

There were flaws in the pact long before the French and the Germans fell through the cracks. Its aim was to make sure countries didn't allow a deficit to grow out of control when economic conditions weren't benign. But in the current climate, a little deficit budgeting isn't exactly a hanging offence.

Except that it has polarised thinking about Europe as an economic zone. Is it a case that the larger economies can do what they want while smaller ones have to formulate a policy that suits France and Germany but not its own economic conditions? This has always been the anti-Europe argument and it has merit. But similar fiscal policies in Europe as a whole are essential for the stability of the euro zone and its currency. (And although the euro has been the currency du jour recently, let's not kid ourselves that it's because traders love Europe. It's because they're not convinced about the US.)

The fall-out from the decision to say it's the pact and not France and Germany that is wrong is as much political as economic. There is, of course, frenzied chatter about altering it to make it more flexible for the different needs of differing countries.

It is now possible that smaller EU countries will band together against the bigger ones, making every future decision harder - especially given the imminent accession of 10 new states most of whom have deficits way in excess of what Europe will allow. I can't see the Slovakian finance minister taking kindly to being lectured about the size of his country's deficit by someone whose own deficit is 60 basis points higher.

Is it possible to make the pact more flexible? Of course, but it didn't suit the French and the Germans to negotiate this before now. At the time of the original negotiations, of course, the thought was that those two countries would be the powerhouses of Europe. As it is, they've turned into wheezy old men, unable to reform their sclerotic economies and bring in much needed changes to increase inward investment.

There are plenty of things I don't like about the American economy and the way it exploits workers to feed the consumer frenzy, but you've got to admire how it makes things work and can turn the ship around damned quickly if needs be. Europe, on the other hand, spends most of its time navel-gazing like a group of press-ganged volunteers on a social committee.

Everyone has to have a say, but nobody says anything very useful. People want results to change but they pursue exactly the same course of action as in the past and so nothing will change. But they complain about it anyway.

Europe still has a number of fundamental economic problems and it is those problems, roosting away in France and Germany, that have caused the current mini-crisis. Aspirant members of the union don't have the same problems in terms of labour, but they're way behind on infrastructure.

They will have a continuing need to run budget deficits in the years ahead and why should they be slapped with a 3 per cent deficit limit when their richer European colleagues have found it impossible to maintain? The concept of a united Europe is still a good one.

Imposed financial discipline is not, in itself, a bad thing. But it is utterly pointless in applying rules to the many which can be broken by the few. I don't think altering the pact is necessarily a bad idea. An element of flexibility in economics is always important.

But altering the pact because France and Germany want it, as opposed to altering it because it's a good thing for Europe as a whole, is a completely different matter. It won't be presented that way, of course, but it doesn't change the fact that, in Europe, all may be equal but some are more equal than others.

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