Conversely, the failure to maintain price stability can often lead to greater instability in employment and output. When inflation rises to unacceptable levels, as it did in the 1970s, monetary policy will be forced to react to restore price stability. This, in turn, could lead to increased instability in employment and output, as it did in the recession in the early 1980s.
We expect the Commission to make the analysis as rigorously as possible and we will back its rigorous implementation of the Pact.” Q. Does that mean “one size fits all”? A. “A few countries have been wise, sound and reasonable in the past, they are in a better situation. The efforts for them will be relatively easy.