While it is clear that, for many – partly formal – reasons, annual budgetary targets always need to be set in nominal terms, the assessment of fiscal policies naturally must take into account cyclical developments. Though the discussion surrounding this issue may, at times, appear confusing, it does not reflect a flaw in the Pact as some critics claim.
In this context, it is worth recalling that most Member States have reached budget positions which are "close to balance or in surplus". Current fiscal problems in other countries have arisen not because the rules are inflexible, but because countries have not honoured their commitments to make progress in fiscal consolidation, particularly during good times.