NAKED RESISTANCE TO REAL ECONOMIC REFORM.

EU Member States offered budgetary impunity on Monday to the Euro-zone's third biggest economy. They ducked out of triggering the early warning procedure against Italy - despite a clear recommendation from the European Commission, and despite Italy's failure to remedy its perilous public finances.

This decision consolidates the laxity that has already allowed Germany and France - the two biggest economies in the Euro-zone - to ignore the EU's rules on budget deficits.

And it heaps further ridicule on the EU apparatus for promoting budgetary discipline. If the Commission is to be over-ruled each time it wishes to issue an early warning, the early-warning procedure is robbed of all sense. Member states at risk of offending against budgetary propriety will remain unconstrained, with the likelihood of more serious problems emerging later.

In April, the Commission highlighted the structural problems and over-optimistic growth assumptions that bedevil Italy, and insisted that permanent measures were needed to deal with the deficit.

To ward off accusations of budgetary nakedness, Prime Minister Silvio Berlusconi came to Brussels himself on Monday. But he wore only a flimsy fig-leaf of respectability: little more than promises, and mainly related only to one-off measures. This is hardly sufficient, even if the promises are met. The mildest winds of adversity are likely to blow this slender device away before...