Central banks no longer subscribe to the dictum attributed to Montagu Norman, Governor of the Bank of England from the 1920s to the 1940s: “never excuse, never explain”. We are not only accountable for achieving our mandate ex post, but we have an obligation to explain the decisions we are taking in real time to deliver price stability over the medium-term.
Under the pact, the EU Member States, whether in or outside the euro area, commit themselves to strive for a near-balanced budget or even a budget surplus. In fact, the pact would bring about a return to the budgetary discipline adhered to before the deficits of many countries began to get out of hand in the 1970s and 1980s.