While the Covid crisis experience was more encouraging, it also revealed that fiscal flexibility is needed and has to be an integral feature of the framework, rather than an all-ornothing button which may, or may not, be pressed in an emergency. But more flexibility will only work if public debt is kept in check and the growth potential of our economy is enhanced.
The European economic rulebook will have to be updated to facilitate this. Does that mean that the Stability and Growth Pact, which our predecessors constructed thirty years ago, was bad economics? No, of course not. Against the economic backdrop of that time, it made perfect sense, and many elements continue to do so.