Regarding the rules, these were agreed in an era of fixed exchange rates, closed capital accounts and highly regulated financial markets when the financial sector was the handmaiden of the real economy. This was well before the widespread liberalisation of trade, financial markets and capital accounts that defines globalisation.
Accordingly, we will continue to monitor very closely all developments over the period ahead. Turning to fiscal policy, the European Commission projects in its January 2009 interim forecast a substantial rise in the average euro area government budget deficit, to 4.0% of GDP this year, from 1.7% in 2008.