First, continuing an accommodative stance for too long may increase problematic international liquidity spillovers, and may eventually contribute to a build-up of systemic risks unless addressed by prudential measures. Second, an unexpected early exit may cause a sharper and quicker than expected tightening of financing conditions in emerging markets, causing sudden reversals of cross-border capital flows and disruptions in financial markets.
As many euro area countries already have high public debt levels, and some have seen their market access threatened, credible fiscal consolidation ensures that debt can be refinanced at affordable rates in the future, and fiscal crises avoided.