The second stability-ensuring institutional feature of EMU is the Stability and Growth Pact. It spells out how member states are supposed to ensure sound public finances, as the Treaty obliges them to avoid excessive deficits.
As long as national budgets are in order, there is no incentive for member states to pursue an overly lax monetary policy, with an eye to reducing the interest burden on their budgets. Wage policy is another national responsibility. Wage agreements have in general been settled in line with productivity advances.