The first issue – the reasons why we need a pact for stability and growth in EMU – may be explained by my fundamental belief that a lack of fiscal discipline would negatively affect the ability of the European Central Bank to achieve its primary objective to maintain price stability.
First, if the ECB is to be able to pursue a price stability-oriented monetary policy, loose fiscal policies in Member States must be avoided, as such a situation would endanger the credibility of the ECB and would place a heavy burden on the ECB’s BIS Review 36/1997  -2-  monetary policy.