This lack of ambition as regards fiscal consolidation, which is not consistent with the provisions of the revised Stability and Growth Pact and falls short of the political commitments made, could potentially undermine the credibility of the new Pact.
The real test of the new Pact’s credibility is still to come, but the indications, particularly from some large Member States, are not very encouraging in this regard. In addition, also wage policies have often not taken sufficient account of the requirements of the new environment – the fact of having a single currency.