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Breaking All the Rules
If there were an Olympic event for irrelevant rulemaking, the E.U. would easily take gold. Last week, two attempts to revamp and reassert regulations were in theory endorsed but in practice ignored. E.U. budget Commissioner Michaele Schreyer had proposed scrapping the U.K.'s 20-year-old rebate from Brussels, worth an average $5.7 billion annually. The payback was negotiated in 1984 by then Prime Minister Margaret Thatcher, when Britain was one of the club's poorest members. The U.K. has since enjoyed unparalleled economic growth — and newer, poorer E.U. members

INDICATORS The Beet Goes On The European Commission announced an overhaul of the E.U.'s sugar regime. Beginning in 2005, Brussels wants production reduced by 16% over four years and the guaranteed price for the region's sugar producers slashed by one-third by mid-2008. Any More Bets? Forging the world's largest gambling firm, Harrah's Entertainment agreed a $9.4 billion deal to buy rival U.S. operator Caesars Entertainment. The tie-up eclipses last month's $7.9 billion takeover of Mandalay Resort Group by MGM Mirage. Both bids await regulatory approval Leaving A Message Mobile-phone users in Lebanon switched off their handsets for 24 hours to protest the high cost of calls. Organizers of the mass switch-off claimed more than half the country's users joined the boycott.

arguably need the money more — so you can see Schreyer's point. But last week Britain refused to budge, calling the rebate "unnegotiable." The dissent has teeth: Britain has the power to veto any proposed changes to the structure of E.U. funding. "I suspect the U.K. will be able to retain the rebate," says Robert Prior-Wandesforde, a European economist at HSBC.

Last week the European Commission also celebrated a court ruling confirming that members must abide by the stability and growth pact, which mandates that euro-zone countries keep deficits under 3% of GDP. Germany and France — the euro zone's biggest economies — have already violated the pact (and look set to do so again this year). Last November, E.U. finance ministers effectively torpedoed proposed action against France and Germany; last week, the European Court of Justice ruled that they should not have done so.

Smaller E.U. countries may cheer — "Situations in which rules are broken should carry precise consequences," says Krzysztof Rybinski, vice president of the National Bank of Poland — but the judgment seems stunningly irrelevant. No one thinks France and Germany will be punished, or get their deficits under the pact's ceiling, anytime soon. And the euro doesn't seem to be hurting from the violations — which raises the question of how crucial the stability and growth pact is in the first place. — With reporting by Tadeusz L. Kucharski

Cutting Hedge
The U.S. Securities and Exchange Commission, seeking to avert fraud in the growing $850 billion hedge fund industry, took a step toward requiring the funds' advisers to register with the regulator and open their books to inspection.

The Bottom Line
	They are going to have us breathing down their neck in every street and every shopping center in the U.K.
		PHILIP GREEN, British retail billionaire, on rival Marks & Spencer after failing in his $16.9 billion bid for the clothing group